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POSTAL  ECONOMICS 


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Charles  Johnson  Post 
Jesse  H.  Neal 


PUBLISHERS'  ADVISORY  BOARD 


*  *•  •       L 


Some  Postal  Economics 

with  special  reference  to  the 

Postal  Zone  System 
and 

Postal  Zone  Law  of  1917 


by 


Charles  Johnson  Post,  Director 

PubHshers'  Advisory  Board 
and 

Jesse   H.   Neal,  Executive  Secretary 
The  Associated  Business  Papers,  Inc. 


PUBLISHERS'  ADVISORY  BOARD 

200   FIFTH   AVENUE 

1918 


^    'A, 


Phess  of 

John  C.  Rankin  Co. 

214-218  William  Street 

New  York 


CONTENTS 

Page 
Foreword 7 


Some  Postal  Economics, 

by  Charles  Johnson  Post 9 

American  Business  and  Zone  Postal  Rates, 

by  Jesse  H.  Neal  33 

Appendix 55 


388348 


FOREWORD 

Postal  Economics  defines  the  principles  and  functions  of  the  postal 
service. 

That  the  postal  service  is  distinctly  Governmental  business  is  clearly 
attested  by  experience  and  universal  custom.  As  a  Government 
function  the  service  can  be  rendered  more  efficiently,  economically, 
and  with  more  particular  regard  for  the  unification  of  the  people  and  the 
cultivation  of  a  national  spirit;  private  exploitation  must  consider 
profits  of  primary  importance — -and  this  would  lead  to  a  limited  expen- 
sive service.  .The  Government  does  not  adventure  in  any  proper 
activity  for  profit* — and  consequently,  commercial  practices  can  be 
subordinated  to  the  advancement  of  the  general  welfare. 

Abstract  principles  can  be  more  readily  apprehended  when  dis- 
cussed in  connection  with  a  practical  proposition.  The  recent  postal 
legislation  is  therefore  taken  as  a  text.  The  legislation  referred  to, 
revived  a  discarded  "zone"  system,  together  with  an  entirely  new 
hazardous  and  complicated  method  for  computing  postage  charge,  by 
embodying  two  different  contrary  postal  rates  and  chargss  (flat  and 
zone)  upon  each  single  piece  of  mail  matter  in  the  second-class,  i.e. 
periodicals  and  newspapers. 

This  revival  of  a  discredited  postal  system  is  a  matter  of  supreme 
pubUc  importance.  No  radical  change  in  postal  principles  should  be 
adopted  without  a  clear  understanding  of  its  full  effect  upon  the  country. 

"The  history  of  civilization  is  the  history  of  the  struggle  for  human 
rights.  Basic  in  this  struggle  is  free  communication  on  equal  conditions. 
Progress  in  the  facilities  for  such  communication  has  made  the  United 
States  postal  service  a  democratic  institution,  "f 


*"The  post  office  also  may  be  administered  with  goocj  reason  on  noncommercial 
principles;  for  the  diffusion  "of  intelligence  is  a  boon  not  measured  by  its  market 
value.  Hence  the  deficit  which  the  United  States  incurs  from  its  cheap  carriage  of 
books,  periodicals,  and  newspapers  is  not  necessarily  a  pubhc  loss,  though  a  similar 
deficit  on  a  parcel  post  for  merchandise  would  be."  {Principles  of  Economics, 
Taussig,  page  371.) 

fHistory  of  the  United  States  Post  Office,  Roper,  1917,  page  79. 


8  IGTJEWORD 

In  these  poir^ted  words  Daniel  C  Roper,  recent  First  Assistant 
Postmaster-General  of  the  United  States,  has  in  his  fine  historical  study 
of  postal  principles  made  clear  the  fundamental  relation  of  postal 
economics  to  the  political  and  social  life  of  our  nation. 

The  postal  service,  widespread,  direct  and  equal,  is  the  life-blood  of  a 
nation;  upon  postal  service  depend  equality  of  opportunity  and  unity 
of  ideals  and  progress.  Upon  equality  of  postal  opportunity  and  acces- 
sibihty  to  all  Americans  depend  our  national  progress  and  our  American 
democracy. 

It  is  in  the  power  of  the  readers  of  American  literature  to  extend 
encouragement  for  the  widespread  dissemination  of  current  news  and 
information,  to  the  end  that  artificial  boundaries  to  national  thought 
shall  be  entirely  obliterated.  Let  thought  flow  freely  among  all  the 
inhabitants  of  our  country.  This  is  the  American  ideal  of  postal 
function  that  paves  the  way  to  a  contented  and  orderly  democracy. 

Examination  of  postal  principles  and  their  bearing  on  the  national 
welfare,  with  consideration  of  the  discredited  postal  zone  system,  is 
submitted  to  the  American  public  in  the  hope  that  it  wi.ll  inspue  vigorous 
popular  demand  upon  Congress  that  it  safeguard  existing  social  service 
agencies — periodicals  and  newspapers — from  parochial-minded  postal 
tinkering,  calculated  to  divide  our  country  into  restricted  postal  zones 
and  sectionalize  the  thought  of  its  citizens. 


SOME  POSTAL  ECONOMICS 


Charles  Johnson  Post 


The  postal  "zone"  system  is  condemned  by  the  history  and  develop- 
ment of  postal  progress. 


It  is  not  possible,  in  the  first  place,  to  consider  the  matter  of  postal 
''zone"  legislation  in  regard  to  publications  without  understanding 
the  evolution  of  the  postal  function  and  the  service  it  performs  in  relation 
to  civilization  and  the  society  of  our  day.  And  in  the  second  place,  the 
function  of  periodicals  in  relation  to  social  progress  and  civilization 
must  itself  be  understood. 

The  periodical  differs  from  manufactured  products  in  general,  as 
that  term  is  ordinarily  used,  in  that  it  confers  a  greater  benefit  upon 
society — both  individually  and  collectively — than  it  does  upon  the 
publishers.  The  chief  beneficiary  of  the  invention  of  printing  was  not 
Guttenberg  or  the  men  who  developed  the  art  of  printing,  it  was  society 
and  civilization;  and  the  benefits  to  society  and  civilization  so  far  out- 
weigh the  incidental  benefit  to  the  inventor  that  such  benefit  becomes 
minute  and  negligible  in  the  measure  of  progress  and  civilization. 

There  are  certain  manufactured  products  that  bear  this  relation 
to  society;  that  is,  they  are  of  far  greater  importance  to  society  than 
they  are  to  the  individual  making  them;  and  any  acts  or  legislation 
that  restricts  or  limits  their  easy  accessibility  falls  with  destructiye 
and  crushing  severity  upon  society,  individually  and  collectively.  As 
an  illustration  of  this  distinctive  character  of  certain  manufactured 
products  I  would  cite,  for  example,  chloroform  and  ether.  Now,  the 
manufacturers  of  chloroform  and  ether  produce  it  for  business  reasons; 
that  is,  the  profit  which  they  make  from  their  manufacture;  but  it  is 
obvious  that  any  act  which  would  result  in  the  restriction  of  the  use 
of  chloroform  or  of  ether,  or  make  them  difficult  and  inaccessible  of 
use,  would  place  the  great  burden  of  penalty  and  suffering  not  upon 
the  manufacturer,  but  upon  society  itself. 

Thus  the  periodical  is  a  social  instrument  of  such  vital  importance  to 
education,  to  progress,  to  the  news  of  current  achievement  and  current 
thought,  and  is  so  obviously  and  essentially  an  intellectual  means  of 
communication  among  humanity,  that  any  restriction  upon  its  acces- 
sibility is  socially  destructive.  The  greatest  minds  that  have  considered 
his  subject  of  the  postal  function  in  relation  to  periodicals  have  recog- 


10  SOME    POSTAL    ECONOMICS 

nized  the  distinctive  social  character  of  pubHcations  and  have  recognized 
that  they  are  not  the  ordinary  manufactured  products  of  commerce.* 

This  principle  and  fact  was  clearly  recognized  even  in  the  earliest 
days  of  American  postal  development,  for  while  the  American  Con- 
stitution was  being  formulated  George  Washington  wrote  to  Mathew 
Carey,  of  Philadelphia,  on  June  25,  1788: 

I  entertain  a  high  idea  of  the  utiHty  of  periodical  pubHcations,  insomuch  that  I 
could  heartily  desire  copies  of  the  museum  and  magazines,  as  well  as  common  gazettes, 
might  be  spread  through  every  city,  town,  and  village  in  America.  I  consider  such 
easy  vehicles  of  knowledge  more  happily  calculated  than  any  other  to  preserve  the 
liberty,  stimulate  the  industry,  and  ameliorate  the  morals  of  an  enlightened  and  free 
people. 

This  was  not  an  isolated  example  of  Washington's  solicitude  over 
the  vital  functions  of  publications,  for  three  weeks  later  he  wrote  to 
John  Jay,  on  July  18,  1788: 

It  is  extremely  to  be  lamented  that  a  new  arrangement  in  the  post  office,  unfavor- 
able to  the  circulation  of  intelligence,  should  have  taken  place  at  the  instant  when 
the  momentous  question  of  a  General  Government  was  to  come  before  the  people. 
I  have  seen  no  good  apology  *  *  *  for  deviating  from  the  old  custom  of  perrnitting 
printers  to  exchange  their  papers  by  the  mail.  That  practice  was  a  great  public  con- 
venience and  gratification.  If  the  privilege  was  not  frorn  convention  an  original 
right,  it  had  from  prescription  strong  pretensions  for  continuance,  especially  at  so 
interesting  a  period.  The  interruptions  in  that  mode  of  conveyance  has  not  only 
given  great  concern  to  the  friends  of  the  Constitution,  who  wished  the  public  to  be 
possessed  of  everything  that  might  be  printed  on  both  sides  of  the  question,  but  it 
has  afforded  its  enemies  very  plausible  pretexts  for  dealing  out  their  scandals,  and 
exciting  jealousies  by  inducing  a  belief  that  the  suppression  of  intelligence  at  that 
critical  juncture  was  a  wicked  trick  of  policy,  contrived  by  an  aristocratic  junto. 
Now,  if  the  Postmaster  General,  with  whose  character  I  am  unacquainted,  and  there- 
fore would  not  be  understood  to  form  an  unfavorable  opinion  on  his  motives,  has  any 
candid  advisers,  who  conceive  that  he  merits  the  public  employment,  they  ought  to 
counsel  him  to  wipe  away  that  aspersion  he  has  incautiously  brought  upon  a  good 
cause.  If  he  is  unworthy  of  the  office  he  holds,  it  would  be  well  that  the  ground  of 
a  complaint,  apparently  so  general,  should  be  inquired  irito,  and,  if  unfounded, 
redressed  through  the  medium  of  a  better  appointment.  It  is  a  matter,  in  my  judg- 
ment, of  primary  importance  that  the  public  mind  should  be  relieved  from  inquietude 
on  this  subject,  j 


*"The  post  office  and. the  telephone  and  telegraph  are  best  managed  under  mon- 
opoly conditions  for  reasons  which  in  part  are  different.  They  are  much  more 
useful  to  the  pul>lic  if  all-embracing  and  singly  managed.  It  is  conceivable  that 
letter  service  should  be  handled  by  one  set  of  companies  in  the  cities,  and  by  another 
set  in  the  country.  The  rates  could  be,  and  probably  would  lie,  lower  in  urlian 
districts,  if  these  were  separately  supplied;  and  it  may  be  a  question  whether  the 
present  uniform  rate,  yielding  high  profits  in  the  cities,  is  in  accord  with  current 
notions  as  to  the  equitable  relation  between  cost  and  price.  But  the  enormous 
convenience  of  being  able  to  reach  any  and  every  correspondent  once  for  all,  at  a 
simple  fixed  rate,  outweighs  any  possible  doubt  as  to  the  equity  of  the  uniform  rate.f 
To  this,  of  course,  must  be  added,  in  case  of  the  post  office,  the  educational  and 
political  gains  from  a  uniform  rate  and  an  all-inclusive  service.  {Prindplea  of 
Economics,  Taussig,  page  400.) 

t"The  expense  of  the  post  office  is  largely  for  collecting,  handling,  sorting.  These 
items  are  the  same  for  every  letter  in  a  given  district.  Mere  transportation  costs 
comparatively  little.  Hence,  a  uniform  charge,  irrespective  of  distance,  is  not  so 
far  out  of  accord  with  cost  as  at  first  it  seems.  This  was  among  the  main  grounds 
on  which  Rowland  Hill  argued  for  his  great  reform  (penny  postage).  In  a  com- 
paratively small  and  densely  settled  country,  a  uniform  jjostage  rate  thus  rests  on 
an  economic  as  well  as  on  a  social  basis.  In  a  vast  country  like  the  Unitetl  States, 
the  economic  reasons  are  less  strong.  Distance  and  cost  of  transportation  count 
for  more  in  the  expenses,  especially  where  not  only  letters  are  carried  but  bulky 
printed  and  miscellaneous  matter.  Uniformity  of  charge,  like  the  extension  of 
free  delivery  into  sparsely  settled  country  districts,  can  be  justified  chiefly  on  larger 
social  grounds."     (Footnote  ibid,  page  400.) 


SOME    POSTAL    ECONOMICS  11 

Washington  was  not  discussing  a  temporary  condition;  he  was 
discussing  the  basic  social  functions  of  periodicals,  together  with  the 
postal  function. 

There  are  other  instances  that  show  how  important  this  subject  was 
in  his  mind  for  in  his  third  annual  message  in  1791  he  again  emphasizes 
the  social  function  of  the  post  office  in  these  particulars: 

The  importance  of  the  post  office  and  post  roads  on  a  plan  sufficiently  liberal  and 
comprehensive,  as  they  respect  the  expedition,  safety,  and  facility  of  communication, 
is  increased  by  their  instrumentality  in  diffusing  a  knowledge  of  the  laws  and  pro- 
ceedings of  the  Government,  which,  while  it  contributes  to  the  security  of  the  people, 
serves  also  to  guard  them  against  the  effects  of  misrepresentation  and  misconception. 
The  establishment  of  additional  cross-posts,  especially  to  some  of  the  important  points 
in  the  western  and  northern  parts  of  the  Union,  can  not  fail  to  be  of  national  utility. 

In  his  fourth  annual  message  to  Congress,  in  1792,  he  said: 

It  is  represented  that  some  provisions  in  the  law  which  establishes  the  post  office 
operate,  in  experiment,  against  the  transmission  of  newspapers  to  distant  parts  of  the 
country.  Should  this  upon  due  inquiry  be  found  to  be  the  fact,  a  full  conviction  of 
the  importance  of  facilitating  the  circulation  of  political  intelligence  and  information 
will,  I  doubt  not,  lead  to  the  application  of  a  remedy. 

And  in  his  fifth  annual  message  to  Congress,  1793,  with  this  sub- 
ject still  in  his  mind,  he  again  lays  emphasis  upon  the  social  function 
of  the  post  office  and  of  publications  in  these  words: 

But  here  I  can  not  forbear  to  recommend  a  repeal  of  the  tax  on  the  transportation 
of  public  prints.  There  is  no  resource  so  firm  for  the  Government  of  the  United  States 
as  the  affections  of  the  people,  guided  by  an  enlightened  policy,  and  to  this  primary 
good  nothing  can  conduce  more  than  a  faithful  representation  of  public  proceedings, 
diffused  without  restraint  throughout  the  United  States. 

The  founders  of  American  liberty  were  keenly  alive  to  the  national 
importance  of  the  post  office — and  in  their  anxiety  to  safeguard  the 
newly  born  American  republic's  life,  urged  that  the  postal  service  be 
used  to  promote  the  widest  and  easiest  possible  circulation  of  periodi- 
cals and  newspapers  throughout  the  length  and  breadth  of  the  land. 

Benjamin  Rush,  one  of  the  signers  of  the  Declaration  of  Independence, 
in  1787,  wrote  an  article  entitled — "The  Revolution  is  Not  Over" — 
in  which  among  other  observations,  he  made  the  following  : 

"For  the  purpose  of  diffusing  knowledge,  as  well  as  extending  the  living  principles 
of  the  Government  to  every  part  of  the  United  States — every  state,  city,  county, 
village,  and  township  in  the  Union  should  be  tied  together  by  means  of  the  post  office. " 

"This  is  the  true  non-electric  wire  of  Government.  It  is  the  only  means  of  carry- 
ing heat  and  light  to  every  individual  in  the  Federal  Commonwealth.  'Sweden  lost 
her  liberties,'  says  the  Abbe  Reynal,  'because  her  citizens  were  so  scattered  that 
they  had  no  means  of  acting  with  each  other.'  It  should  be  a  constant  injunction 
to  the  postmasters  to  carry  newspapers  free  of  all  charges  for  postage.  They  are 
not  only  the  vehicles  of  knowledge  and  civilization,  but  the  sentinels  of  the  liberties 
of  our  country. " 


tin  1789  [which  is  approximately  the  time  that  President  Washington  was  writing] 
there  were  in  all  the  thirteen  States  only  75  postmasters.  The  mails  were  carried 
on  less  than  2,000  miles  of  post  roads,  consisting  of  one  long  route  paralleling  the 
Atlantic  coast,  with  a  few  cross  posts,  serving  important  inland  towns.  The  entire 
annual  cost  of  carrying  mails  was  less  than  .125,000;  but  this,  with  the  other  expenses 
of  the  service  was  greater  than  the  revenue,  which  had  been  reduced  to  a  figure  less 
than  had  been  realized  by  the  British  Colonial  post  office  15  years  before. — {History 
of  the  United  States  Post  Office,  1917,  Roper,  page  44.) 


12  SOME    POSTAL    ECONOMICS 

That  Congress  in  those  days  was  strongly  influenced  by  an  appre- 
ciation of  the  tremendous  social  function  of  the  Post  Office  is  attested 
by  the  fact  that:  although  they  had  deficits  in  those  days,  the  Postal 
Department  was  not  frightened  by  deficits.  In  1789  the  struggling 
American  Post  Office  was  confronted  with  a  deficit — a  serious  matter 
in  those  days — but  instead  of  bending  its  energies  to  a  restriction  of 
the  Postal  Service,  it  proceeded  to  appropriate  more  money  and  extend 
the  Postal  Service  throughout  the  young  Nation,  in  furtherance  of 
unity  and  social  progress. 

The  postal  function  has  developed  in  a  series  of  epochs,  each  one 
marked  by  certain  definite  pronouncements  in  regard  to  the  social 
function  of  the  post  office  in  relation  to,  and  its  effects  upon,  the  people 
of  this  Nation.  In  1844  a  postal  commission  appointed  by  the  House 
of  Representatives  of  the  United  States  again  laid  down  the  specific 
and  fundamental  principles  governing  the  real  postal  functions.  It 
said  that  the  postal  function  was: 

To  content  the  man  dwelling  more  remote  from  town  with  his  lonely  lot,  by  giving 
him  regular  and  frequent  means  of  intercommunication;  to  assure  the  emigrant  who 
plants  his  new  home  on  the  skirts  of  the  distant  wilderness  or  prairie  that  he  is  not 
forever  severed  from  the  kindred  and  society  that  still  shares  his  interest  and  love; 
to  prevent  those  whom  the  swelling  tide  of  population  is  constantly  pressing  to  the 
verge  of  the  wilderness  from  sinking  into  the  hunter  or  savage  state;  to  render  the 
citizen  how  far  soever  from  the  seat  of  government  worthy,  by  proper  knowledge  as 
a  sovereign  constitutent  of  the  Government,  to  diffuse  throughout  all  parts  of  the  land 
enlightenment,  social  improvement,  and  national  affinities,  elevating  our  people  in 
the  scale  of  civilization  and  binding  them  together  in  patriotic  affection. 

And  in  1849  Congressman  Palfrey,  in  speaking  of  the  importance 
of  the  administration  of  the  post  office  on  lines  of  sound  and  fundamental 
principles,  said: 

I  think  much  of  colleges:  I  dearly  love  common  schools,  but  I  shall  not,  at  present, 
undertake  to  say  that  cheap  postage  will  not  turn  out  to  be  an  institution  for  educa- 
tion more  efficient  than  any  other.  I  can  not  tell  how  soon  it  might  be  a  question 
whether  the  mariner's  compass  or  the  art  of  printing  had  changed  the  condition 
of  man  more  than  a  good  system  of  postage.  Never  was  a  simpler  mechanism  devised 
for  working  out  good  and  great  effects. 

The  struggle  for  the  abrogation  of  the  postal  "zone"  system  was  in 
progress  which  culminated  in  the  abolition  of  postage  zones  and  in  the 
establishment  of  a  flat,  uniform  rate  of  postage.  This  was  done  by 
Abraham  Lincoln  in  1863  and  upon  the  strong  urging  and  recom- 
mendation of  Postmaster  General  Blair.* 

This  marked  the  abandonment  of  any  lingering  traces  of  cost  of 
services  and  the  unsound  commercializing  of  the  post  office  through 
the  postal  zone  system. 

The  greatest  intellects  in  America  have  given  thought  to  the  principles 
and  functions  of  the  Postal  Service.     They  have  considered  the  postal 


♦Postmaster  Blair  in  his  report  to  the  President,  September  12th,  1862,  said: 
"I  recommend  a  great  reduction  in  the  variety  of  rates  for  printed  matter  for 
domestic  circulation,  abolishing  all  distinction  of  rates  based  on  different  distances 
of  transportation,  adopting  decimal  rates  conforming  to  the  coinage  of  the  country 
instead  of  the  fractional  rates  now  prevailing  and  equalizing  the  charges  now  varied 
according  to  distance." 


SOME    POSTAL    ECONOMICS  13 

zone  system,  and  as  the  result  of  searching,  patriotic  investigation 
have  unreservedly  condemned  it  as  adversely  affecting  the  interests 
of  this  country.  The  post  office  is  primarily  a  service  to  the  people; 
if  it  is  a  mercantile  or  commercial  enterprise,  it  has  no  business  as  a 
governmental  department.  It  does  not  differ  in  its  underlying  prin- 
ciples, in  its  services  to  the  people  from  the  Department  of  Agriculture, 
the  Department  of  Commerce,  the  Labor  Department,  the  Army  or 
the  Navy,  or  the  Department  of  Justice. 

Senator  Charles  Sumner's  great  speech  on  postal  principles  of  June 
10th,  1870,  is  clear  and  convincing: 

"There  is  nothing  in  the  Constitution"  or  in  reason  to  distinguish  the  Post 
Office  in  this  respect  from  the  Army,  the  Navy,  or  the  Judiciary.  The  Consti- 
tution confers  upon  Congress  the  power  "to  establish  post  offices  and  post  roads" 
precisely  as  it  confers  upon  Congress  the  power  "to  raise  and  support  armies" 
— the  power  "to  provide  and  maintain  navies,"  and  the  power  to  "constitute 
tribunals  inferior  to  the  Supreme  Court, "  and  in  each  of  these  cases  it  is  empowered 
"to  make  all  laws  which  shall  be  necessary  and  proper  for  carrying  into  execution 
the  foregoing  powers. "  Nobody  suggests  that  now  in  peace  our  armies  shall  amplify 
their  commissariat  by  enforced  contributions;  that  our  Navy  shall  redouble  its 
economies  by  supplementary  piracy;  or  that  our  tribunals  inferior  to  the  Supreme 
Court  shall  eak  out  a  salary  by  requisitions  on  the  suitors — to  the  end  that  each  of 
the  departments  may  be  in  some  measure  "self-supporting."  Why,  then,  should 
the  Post  Office  be  subjected  to  a  different  rule?  Not,  surely  because  it  is  less  bene- 
ficent; not  because  it  is  the  youngest  child  of  Government,  a  very  "Benjamin" 
coming  into  being  long  after  the  others.     But  such  is  the  case. 

"The  rule  for  the  others  is  discarded  when  we  come  to  the  Post  Office,  and  here  for 
the  first  time  we  hear  that  a  department  of  Government  must  be  "self-supporting. " 
As  there  is  no  ground  in  the  Constitution  for  this  pretense,  so  is  there  none  in 
reason. 

"Of  all  existing  departments  the  Post  Office  is  most  entitled  to  consideration,  for  it 
is  most  universal  in  its  beneficence.  That  public  welfare  which  is  the  declared 
object  of  all  the  departments  appears  here  in  its  most  attractive  form.  There  is 
nothing  which  is  not  helped  by  the  Post  Office. 

"  Is  business  in  question?  The  Post  Office  is  at  hand  with  invaluable  aid,  quicken- 
ing and  multiplying  all  its  activities. 

"  Is  it  charity?  The  Post  Office  is  the  good  Samaritan  omnipresent  on  all  the  high- 
ways of  the  land. 

"Is  it  the  precious  intercourse  of  family  or  friends?  The  Post  Office  is  carrier, 
interpreter,  and  handmaid. 

"Is  it  education?  The  post-office  is  schoolmaster  with  school  for  all  and  with 
scholars  counted  by  the  million. 

"Is  it  the  service  of  Government?  The  Post  Office  lends  itself  so  completely  to 
this  essential  work  that  the  national  will  is  conveyed  without  noise  or  effort  to  the 
most  remote  corners,  and  the  Republic  becomes  one  and  indivisible. 

"Without  the  post  office  where  would  be  that  national  unity  with  irresistible  guar- 
antee of  equal  rights  to  all,  which  is  now  the  glory  of  the  Republic?  Impossible — 
absolutely  impossible.  Therefore,  in  the  name  of  all  these,  I  do  insist  that  now,  in 
these  days  of  equality,  the  post  office  shall  be  admitted  to  equality  with  all  other 
departments  of  the  Government,  so  that  it  may  discharge  its  own  peculiar  and  many- 
sided  duties  without  being  compelled  to  find  in  itself  the  means  of  support.  It  has 
enough  to  do  without  taking  thought  of  the  morrow.  On  every  side  and  in  every 
direction  it  is  the  beneficent  helper.  To  the  Army  it  is  a  staff;  to  the  Navy  it  is  a 
tender;  to  the  Treasury  it  is  a  support;  to  the  judiciary  it  is  a  police;  to  President  and 
Congress  it  is  an  adjunct;  and  to  all  else,  public  or  private,  whatever  the  interest, 
aspiration,  or  sentiment,  it  is  an  incomparable  ally.  Better  than  two  blades  of  grass 
where  only  one  grew  before,  and  when  the  precious  product  is  measured  by  millions 
you  see  the  vastness  of  the  l)enevolence. 


14  SOME    POSTAL    ECONOMICS 

OUR    tOST   OFFICE   MUST   BE   THE    BEST   IN   THE   WORLD. 

*  *  *  The  very  extent  of  our 'country,  which  is  superficially  urged  as  the  apology 
for  a  high  rate,  is,  to  my  mind,  an  all-sufficient  reason  for  the  proposed  reform. 
Because  our  country  is  broad  and  spacious,  therefore  must  distant  parts  be  brought 
into  communication  and  woven  together  by  daily  recurring  ties. 

As  a  logical  development  of  the  social  and  educational  functions 
of  the  post  office  in  relation  to  our  Nation,  the  present  law  of  one  cent 
a  pound  on  periodicals  was  established  in  1885,  with  the  deliberate 
and  avowed  intention  of  establishing  widespread  national  circula- 
tion of  periodicals,  and  what  Washington  called  "pubhc  prints,"  and 
for  the  distinct  purpose  of  encouraging  widespread  reading  throughout 
American  homes  and  among  American  people. 

That  there  would  be  expenses  was,  of  course,  anticipated,  that  those 
expenses  might  even  be  greater  than  the  immediate  revenue  was  also 
anticipated  and  recognized  just  as  the  total  deficits  in  the  Department 
of  Agriculture  and  the  Department  of  Justice,  in  the  Army  and  the 
Navy,  are  turned  in,  not  as  deficits  to  the  Nation,  but  as  necessary  expen- 
ditures for  the  tremendous  safeguards  to  the  Nation  and  as  powerful 
urges  in  its  progress.  Postmaster  General  Vilas,  in  his  annual  report, 
June  30,  1887,  stated: 

The  taxation  for  the  maintenance  of  the  Postal  Service  by  the  imposition  of  postage 
levies  on  its  beneficiaries  commends  itself  as  the  justest  form  in  which  the  burdens  of 
Government  can  be  assessed  upon  citizens,  if  the  assessments  be  laid  with  discrimi- 
nating fairness.  It  must  be  conceded  that  the  disproportionate  levy  upon  news- 
papers and  periodicals — which  furnish  perhaps  one-third  the  weight  and  bulk  of  our 
mails,  while  they  return  but  about  one-fortieth  of  the  revenue — -violates  this  principle; 
but  it  has  been  yielded  in  this  instance  to  the  general  advantages  of  a  freer  circula- 
tion of  intelligence,  the  attainment  of  which  should  be  regarded  as  a  sufficient  con- 
sideration. 

Otherwise  the  present  rates  appear  to  recognize  the  differences  between  the  dif- 
ferent classes  of  matter  with  as  near  approximation  of  justice  as  can  be  attained  in  our 
currency ;  the  greater  burden  being  upon,  and  probably  all  the  profit  arising  from,  the 
carriage  of  first-class  matter,  which  must  make  good  the  loss  sustained  in  the  other 
classes,  in  order  to  a  self-sustaining  service. 

The  paramount  duty  of  the  Government,  so  far  as  concerns  this  department,  is  to 
furnish  the  most  perfect  and  useful  postal  facilities  to  the  people,  within  the  au- 
thority of  the  Constitution,  which  the  skill  of  man  can  provide.  It  is  due  to  the 
character  of  the  citizens  of  this  country,  to  their  freedom  and  enlightenment,  to  their 
enterprise  and  activity,  to  their  wealth  and  power,  and  especially  to  the  intimacy  of 
their  personal  relations  maintained  over  so  great  an  expanse  of  territory,  to  an  extent 
never  equaled,  hardly  aimed  at,  elsewhere  on  the  globe,  from  which  arise  the  fra- 
ternity of  feeling  and  community  of  interest  that  furnish  the  safest  guaranties  for  the 
future  stability  and  value  of  our  Federal  institutions.  It  is,  indeed,  their  due  as  a 
personal,  individual  right,  because  the  Government  monopolizes  the  postal  business 
and  forbids  them  all  other  attempts  at  self  service. 

Upon  every  ground  the  postal  service  rightfully  urges  a  constant  and  exacting 
demand  upon  legislative  and  executive  wisdom  and  labor  for  its  enlargement  and  im- 
provement to  the  utmost  of  perfectibility. 

Whatever  the  postal  revenue,  whether  it  be  sufficient  to  postal  burdens  or  whether 
the  General  Treasury  be  chargeable  for  their  support,  this  superior  obligation  remains 
unchanged  and  undeniable.  The  method  by  which  the  taxation  which  maintain 
the  service  is  imposed — so  that  it  be  constitutional  and  not  unjust  or  partial — -is  of  far 
less  consequence  to  the  country  than  the  character  and  efficiency  of  the  facilities  it 
affords.  Yet,  obvious  as  this  principle  of  governmental  duty  appears  to  be,  it  will 
rarely  command  the  same  obedience  in  practical  legislation  or  administration  when, 
by  abridgment  of  the  postal  revenues,  the  service  imposes  a  heavy  charge  upon  the 
General  Treasury,  as  when  its  independent  revenues  are  sufficient  to  meet  its  exi- 
gencies. 


SOME    POSTAL    ECONOMICS  15 

Since  that  day  postal  commissions  have  been  created  by  Congress, 
and  they  all,  however  they  may  differ  in  detail,  up  to  the  latest,  known 
as  the  Hughes  Commission,  unequivocally  condemn  the    postal-zone 

system* 

For  the  postal-zone  system  increases  the  postage  cost  to  the  reader 
of  periodicals  in  increasing  proportion,  according  to  their  accidental 
remoteness  from  the  place  of  publication.  That  it  would  lessen 
reading  throughout  the  Nation  can  not  be  doubted.  And  it  is  a 
curious  commentary  of  history  that  in  1774,  two  years  before  the 
American  Revolution,  when  the  colonists  were  restless  with  new 
ideals  of  liberty,  the  British  Post  Office,  instead  of  establishing  a 
censorship  or  a  direct  suppression  of  the  periodicals  of  that  day, 
accomplished  their  purpose  by  means  of  huge  postage  increases  on 
the  periodicals  and  prints;  and  yet,  146  years  later,  in  1917,  dur- 
ing the  most  momentous  period  in  our  Nation's  history,  the  United 
States  Congress  enacted  a  law  that  will  have  the  same  effect  on  the 
periodical  circulation  as  the  Royalists'  scheme  for  hampering  political 
freedom  and  idealism  in  America. 

It  is  an  indisputable  fact  that  the  periodical  is  distinctive  from 
usual  manufactured  products  in  that  (1)  it  is  a  social  instrument  without 
which  our  present  civilization  would  be  impossible,  and  (2)  that  it  not 
only  is  distinctive  but  differs  from  all  other  products  of  manufacture  in 
that  it  is  sold  to  the  ultimate  consumer,  i.e.,  the  reader,  at  less  than  its 
actual  cost  of  production.  This  latter  distinction  is  further  emphasized 
by  the  fact  that,  in  general,  publications  are  sold  to  the  subscriber  at  less 
than  he  would  be  able  to  purchase  the  unprinted,  white  paper  at  the 
mill  in  wholesale  quantities;  this  is  only  true  of  magazines  since  1885, 
when  the  one-cent-a-pound  rate  for  second-class  mail  matter  was 
adopted. 

Moreover,  since  1885  periodicals  have  been  constantly  lessening  in 
price  and  increasing  in  content  and  the  service  rendered  our  Nation. 
Before  that  date  magazines  were  comparatively  few  and  they  were 
expensive.  The  five  cent  magazine,  the  ten  cent  magazine,  and  the 
fifteen  cent  magazine  are  the  results  of  that  second-class  postage  law 
of  1885,  which  has  placed  within  reach  of  the  humblest  and  the  poorest 
American  home,  the  finest  achievements  of  intellectual  and  scientific 
progress.  The  five,  ten  and  fifteen  cent  magazines  were  undreamed  of 
before  1885,  when  the  magazines  were  twenty-five  and  thirty-five  cent 
magazines  intended  only  for  the  already  informed  and  cultured  and 
super  cultured  classes,  and  these  twenty-five  and  thirty-five  cent  maga- 
zines were  the  standard  price  magazines  at  a  time  when  the  purchasing 
value  of  twenty-five  and  thirty-five  cents  was  more  than  double  its 
value  to-day.  So  that,  in  order  to  secure  a  measure  of  what  twenty-five 
and  thirty-five  cent  magazines  meant  to  the  people  of  this  country 
and  to  our  social  system  we  must  consider  it  in  terms  of  fifty  and  seventy- 
five  cents  a  copy  as  compared  with  the  prevailing  prices  of  the  popular 
magazines. 


*0f  the  postal  zone  law  hastily  passed  in  1917,  Charles  E.  Hughes,  Chairman  of 
the  Postal  Commission  wrote: 

"I  hope  that  Congress  will  repeal  the  provision  for  the  zone  system  which  is 
decidedly  a  looking-backward  and  walking-backward  measure, "  (for  the  full  letter 
condemning  the  "Zone"  system  see  Appendix  A). 


16  SOME    POSTAL    ECONOMICS 

The  law  of  1885,  fixing  the  cent-a-pound  rate  on  periodicals  was 
adopted  on  the  principle  that  widespread  reading  and  accessibility  of 
information,  of  reports  of  cultural,  economic,  scientific  and  sociological 
progress  was  important  to  the  Nation.  And  the  publishers  of  this 
country  have  kept  faith  with  that  law  and  with  its  fundamental  postal 
principle  for  they  have  not  raised  the  price  of  magazines  but,  on  the 
contrary,  have  continually  sought  to  lower  the  price  of  periodicals  and 
'"to'extend  the  field  of  their  accessibility  and  serviceability. 

Periodicals  are,  with  comparatively  few  exceptions,  sold  to  the  reader 
at  less  than  their  cost  of  manufacture,  and  this  has  been  made  possible 
through  the  development  of  advertising  in  which  the  commercial 
enterprises  of  this  country  pay  the  difference  between  the  cost  and  the 
selling  price.  Cheap  reading  matter  of  all  kinds  is  available  to  the 
American  people,  because  advertising  carries  the  main  cost  of  publishing 
and  also  because  publishers  have  been  able  to  deliver  their  products 
in  any  part  of  the  country  at  a  reasonable  flat  rate  of  postage.  The 
amount  of  money  spent  by  publishers  on  many  of  our  great  technical 
journals  for  articles,  reports,  researches,  and  other  matter  in  the  reading 
pages  proper  is  so  greatly  out  of  proportion  to  the  money  received  from 
subscribers  that  only  careful  building  up  of  advertising  patronage  and 
revenue  makes  such  journals  possible  at  all. 

What  the  reading  pages  of  a  periodical  are  to  the  intellectual  pro- 
gress of  this  Nation  the  advertising  pages  are  to  the  economic  growth 
of  our  country;  for  national  advertising  is  also  a  new  instrument  of 
economic  progress  and  social  service  that  has  developed  with,  of,  and 
by  periodical  growth. 

National  advertising  is  one  of  the  greatest  social  and  economic  instru- 
mentalities ever  devised  for  the  distribution  of  manufactured  wealth  and 
its  production;  it  has  made  possible  to  the  manufacturer  the  establish- 
ment and  growth  of  a  business  rapidly  which  without  the  development  of 
advertising  would  have  taken  years  or  would  have  been  impossible. 
Advertising  is  nothing  more  nor  less  than  a  salesman,  an  automatic, 
sleepless  salesman  who  can  perform  selling  functions  at  an  infinitesimal 
cost  and  in  regions  and  to  people  that  would  be  inaccessible  through  the 
old-fashioned  channels  of  individual  commercial  selling. 

When  legislation  attacks  national  advertising,  through  the  post 
office  or  by  any  other  means  that  will  restrict  it,  the  post  office  and  postal 
legislators  are  attacking  and  restricting  wealth-production  itself. 

This  postal  "zone"  law,  no  matter  by  what  name  it  is  called,  is 
a  discriminatory  tax  against  national  advertising.  For  this  postal 
"zone"  law  places  a  tremendous  and  successive  increase  in  postage 
upon  national  publications  and  penaUzes  them  according  to  the  amount 
of  advertising  that  they  print.  It  is  distinctly — according  to  the 
language  of  the  Statute  as  enacted  and  according  to  the  open  statements 
of  its  most  strenuous  defenders — nothing  but  a  tax  upon  the  national 
advertising  that  is  carried  in  periodicals  of  national  circulation.  It 
distinctly  exempts  from  taxation  all  local  publications  or  publications 
of  local  circulation.  It  is  a  penalty  or  tax  that  discriminates  against 
the  national  periodicals  and  in  favor  of  local  publications. 

It  is  no  wonder  that  the  local  publications  have  so  energetically 
carefully,  and  enthusiastically  supported  this  so-called  postal  "zone" 


SOME    POSTAL    ECONOMICS  17 

legislation,  which  really  is  an  unfair  discriminatory  tax  against  one 
class  of  advertisers  and  publishers  and  in  favor  of  another  class  of 
advertisers  and  publishers.  The  publications  of  local  circulation  are 
enthusiastic  for  this  law  which  attacks  advertising  in  periodicals  of 
national  circulation  and  exempts  advertising  in  publications  of  local 
circulation;  they  have  passed  resolutions  throughout  the  country 
indorsing  this  law;  they  have  written,  talked  and  circularized  each 
other  in  advocacy  of  this  postal  "zone"  system  with  its  careful  dis- 
criminations in  their  favor;  not  satisfied  with  the  discriminations 
against  national  periodicals,  they  have  bent  every  energy  before  Con- 
gress in  support  of  what  they  call  the  McKellar  amendment,  which 
would  still  further  increase  the  discrimination  against  advertising 
in  national  periodicals  by  extending  the  zones  of  low  postage  rate  in 
which  local  publications  circulate  with  their  advertising.  This  is  what 
one  of  them — and  one  very  widely  quoted  in  Congress  and  throughout 
the  country — has  to  say  in  support  of  this  discriminatory  tax  against 
national  advertising: 

Besides  all  that,  I  am  mercenary  in  my  opposition  to  your  program  (repeal  of  the 
postal  zone  law).  Three  hundred  miles  on  every  side  is  all  the  territory  I  want  for 
my  publication,  and  is  enough  for  any  newspaper.  I  want  the  newspaper  that  comes 
into  my  territory  from  Minneapolis,  Chicago  and  New  York  to  pay  high  for  the  privi- 
lege. *  *  *  Furthermore,  I  am  opposed  to  classifying  newspapers  with  magazines 
and  periodicals  for  postage  purposes.     *  *  * 

If  Congressmen  do  their  full  duty  to  their  Government  and  their  home  constituents, 
the  only  changes  that  will  be  made  in  the  present  (postal  zone)  law  will  be  to  put  a 
few  more  teeth  in  it  which  will  make  second  class  mail  pay,  mile  for  mile  or  zone  for 
zone,  the  cost  to  the  Government  for  handling  it.  When  that  is  done  the  country 
newspaper  will  come  into  its  own,  for  it  will  have  an  advertising  and  subscription 
value  it  has  never  had  before. 

It  has  been  represented  by  these  advocates  of  this  unequal  postal 
law  that  it  will  cut  down  an  alleged  Post  Office  deficit.  In  the  first  place 
the  Post  Office  Department  has  shown,  instead  of  a  deficit,  a  surplus  of 
over  $12,000,000  in  1917,  and  over  $19,000,000  in  1918;  and  in  the 
second  place,  the  postal  "zone"  which  they  so  strenuously  favor, 
alleged  to  have  been  adopted  because  of  a  postal  deficit,  specifically 
exempts  certain  classes  of  publications  from  the  payment  of  any  postage 
whatsoever.  There  is  not  one  argument  that  can  be  advanced  in  support 
of  the  carrying  of  this  mail,  for  which  no  charge  is  made,  that  does  not 
apply  with  equal  force  to  maintaining  the  periodical  postage  law  of 
1885  as  applied  to  all  American  publications. 

This  postal  zone  legislation  has  been  ostensibly  based  on  a  non- 
existing  Post  Office  deficit.  It  ignored  the  findings  of  the  United 
States  postal  commissions  which  investigated  this  subject.  The  latest 
postal  commission,  known  as  the  Hughes  Postal  Commission,  un- 
equivocally condemned  the  postal  zone  system.  It  also  ignored  the 
findings  of  the  commission  just  previous  to  the  Hughes  Commission, 
known  as  the  Penrose-Overstreet  Postal  Commission,  which  also 
condemned  the  postal  zone  system.* 

The  adoption  of  this  postal  zone  law  has  defied  and  denied  the  con- 
clusions of  both  of  these  official  commissions  in  regard  to  the  postal  zone 

*See  Appendix  B  for  Postal  Tabulations  and  Confusions  in  Post  Office  Accounting 
and  Evidence. 


18  SOME    POSTAL    ECONOMICS 

system.  The  Post  Office,  according  to  the  reports  of  both  commissions 
has  never  been  able  to  furnish  adequate  or  substantial  data  upon 
which  to  base  cost  legislation,  for  the  Post  Office  Commission  the 
Penrose-Overstreet  Commission  stated:* 

The  Post  Office  Department  is  not  now  able  and  has  never  been  able  to  furnish 
statistics  as  to  the  cost  of  the  various  classes  of  mail  matter.  *  *  *  Until  the  entire 
system  of  expenditure,  accounting,  and  bookkeeping  of  the  Post  Office  Department 
is  completely  overhauled  and  put  upon  a  new  basis,  it  will  be  impossible,  even  with 
all  the  results  from  the  present  weighing  (referring  to  the  weighing  of  1906)  statistically 
to  ascertain  the  cost  of  the  respective  classes. 

The  Hughes  report,  made  in  1912,  stated  that  it  was  impossible  to 
secure  from  the  Postal  Department  adequate  records  later  than  1908. 

In  other  words,  every  argument  based  upon  statistics  in  regard  to 
postal  matters  is  based  upon  figures  compiled  in  1908,  or  10  years  ago. 

Moreover,  the  Hughes  Commission  stated : 

Our  attention  has  been  directed  to  the  fact  that  the  Postmasters  General  in  their 
annual  reports  have  repeatedly  commented  upon  the  increase  in  the  volume  of  second 
class  matter,  and  upon  the  disparity  between  the  supposed  cost  of  transporting  and 
handling  it  in  the  mails  and  the  amount  received  as  postage.  Their  estimates  evi- 
dently reflected  the  opinion  of  the  officers  of  the  department,  laut  they  were  based 
upon  general  experience  in  the  service  and  not  upon  a  scientific  ascertainment  of 
cost.f 

And,  further,  as  to  the  relation  between  the  poundage  of  second 
class  matter  and  deficits  alleged  to  be  caused  by  these  periodicals, 
the  Hughes  Commission  found: 

''But  it  may  be  observed  that  neither  the  reductions  in  the  paid-at- 
the-pound  rate  of  1874,  1879,  and  1885,  nor  the  increase  in  tonnage 
of  paid-at-the-pound  matter  during  the  same  period — nor  yet  the  very 
large  increase  of  1910 — can  be  shown  to  have  exercised  a  controlling 
influence  upon  the  department's  deficit "t  so  that,  by  the  findings  of 
the  Hughes  Commission  we  are  scientifically  assured  that  the  large 
increase  of  periodicals  at  the  pound  rate  in  1910  had  no  controlling 
influence  upon  any  postal  deficit,  and  that  there  has  been  since  that 
date  no  official  examination  to  disclose  3,ny  change  of  those  fundamental 
principles  laid  down  by  the  Hughes  Commission. 

Moreover,  since  the  Hughes  Commission  report  the  post-office  has 
changed  its  whole  system  of  handling  second-class  mail  and  its  method 
of  transportation.  It  has  changed  from  a  weight  basis  to  a  space  basis 
on  the  railroad  trains  and  has  introduced  the  transportation  of  periodi- 
cals by  means  of  freight  cars,  instead  of  postal  cars.§ 

The  chart,  entitled,  "Comparison  of  Postal  Revenues  from  1837  to 
1917,"  shows  the  destructive  effect  on  postal  revenues  of  a  zone 
system  (abolished  in  1863)  and  the  tremendous  increase  of  postal 
revenues  through  the  adoption  of  special  postage  for  magazines  in  1885. 


*Penrose-Overstreet  Postal  Report,  (House  Doc.  No.  608;  59  Cong.  2d  sess.) 

tMessage  of  the  President  transmitting  the  yVnnual  Report  of  the  Postmaster 
General  for  1911 — and  Report  of  the  Commission  on  Scc^ond-class  matter,  page  6.'5. 
(Ibid  64.) 

JThe  figures  are  supplied  in  the  Postmaster  General's  report  of  1917,  on  page  118, 
in  the  exact  fractions. 

§Postmaster  General 's  Report,  1917,  p.  17. 


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2i)  SOME    POSTAL    ECONOMICS 

From  1837  to  1863,  when  the  zone  system  was  in  effect,  the  postal 
revenue  of  the  department  ranged  from  26  cents  to  33  cents  per  capita. 

In  1863  the  postal  zone  system  was  abolished  by  President  Lincoln, 
and  the  flat  rate  of  postage  established. 

From  1863  to  1885  there  is  a  tremendous  upward  curve  in  the  postal 
receipts  per  capita,  jumping  to  76  cents  per  capita  in  1885. 

In  other  words,  an  increase  of  over  200  per  cent  in  postage  revenue 
was  accomplished  by  the  abolition  of  the  postal  zone  system. 

In  1885  the  one-cent-a-pound  periodical  postage  law  was  established 
for  the  encouragement  and  development  of  widespread  and  accessible 
reading  and  information.  And  under  this  law  the  postal  receipts  per 
capita  grew  from  a  maximum  85  cents  per  capita  in  1883  to  $3.16 
per  capita  in  1917. 

The  chart  marks  the  three  periods,  the  first  period  from  1837  to  1863 
when  we  had  the  postal  zone  system,  and  the  rate-by-distance  system. 
The  second  period  or  postal  epoch  from  1863  to  1885,  when  we  had  a  flat 
rate,  and  the  zone  system  was  abolished,  and  marking  the  increase 
in  postal  revenues  during  that  time.  And  the  last  epoch  from  1885 — 
when  one-cent-a-pound  postage  was  introduced — up  to  1917,  shomng 
a  marked  upward  trend  in  postal  revenues. 

It  will  be  observed  that  there  was  no  growth  in  the  postal  service, 
which  ran  along  at  practically  a  dead  level  until  1863.  From  1863 
the  postal  revenues  went  from  33  cents  to  85  cents  per  capita  in  1883, 
dropping  off  in  1885  to  76  cents.  In  other  words,  there  was  an  increase 
of  over  250  per  cent  in  postal  revenues.  This  was  accomplished  by  the 
abolition  of  the  postal  zone  system  as  is  clearly  indicated  by  the  steady 
increase  in  per  capita  postal  revenues  directly  following  the  introduction 
of  the  low  second  class  rate  on  publications.  It  is  further  proven  by 
the  fact  that  while  periodical  poundage  increases  so  do  the  per  capita 
postal  revenues! 

In  1885  the  one-cent-a-pound  periodical  postage  law  was  established 
for  the  encouragement  and  development  of  widespread  and  accessible 
reading  and  information,  and  under  this  law  the  postal  receipts  per 
capita  advanced  from  76  cents  per  capita  to  $3.16  per  capita  in  the 
year  1917  and  $3.67  in  1918. 

In  this  connection  it  is  interesting  to  note  that  since  1885  the  popu- 
lation of  this  country  has  only  approximately  doubled  while  the  postal 
receipts  have  increased  over  4OO  per  cent. 

Your  attention  is  next  invited  to  the  chart  headed  "Comparison 
of  postal  surplus  and  deficit  from  1838  to  1917,"  which  shows  that  as 
postal  service  has  extended  and  increased  that  deficits  distinctly  tend 
to  diminish. 

The  deficits  are  not  given  in  actual  dollars,  but  in  the  percentage 
compared  with  the  expenditures  of  that  year,  which  is  the  only  rational 
method  of  comparison.  Observe  that  the  heaviest  deficits  occurred  in 
those  periods  in  which  the  postal  service  ivas  most  restricted  and  when 
its  benefits  were  reserved  through  the  postal  zones  and  high  charges 
to  the  patrons — -to  the  wealthier  and  already  educated  classes.     The 


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OF   SURPLUS  AND  DEFICIT 


PAID  POUNOACE   OF   PERIOOICAtS 
1.141620,456  -1917 

1,047.144,274  -WIS 
l,026,<)OI,]67  -r^l4 
997,547,040  -I'm 
939,94aJ55  -19a 
893,39<\908  -1911 
817,772,900  -Ilia 
71SIU31182  -I90<> 
69'«.8«5,884  - 1908 
712.945.176  -f9o; 
<>6O,3}«,840  -  iq06 

fi8,6*4.754  -rgos 
5691TI9.8I?  -1904 
509,53J,»62  -1905 
454,152.359-1902 
429,444.551  -1901 
382.538.999  - 1900 
352,703,2X-I«99 
336,|]ei33(  - 189« 
3fO,658,l5S  - 1897 
396,640351-1896 
265,314,382-1895. 
554,790,306  -  H94 
2S5,6M.JI3  -  M9J 
22J.642.J92  -  P69J 
196,942,092  -  l»9l 
174,040,764  -  l«90 
161,695,127  -  K89 
143.662,918  -  1888 
126,2)4,883-  1887 
109,962,519  -  1886 
101,057,963-1885 


Hit 


SOME    POSTAL    ECONOMICS  23 

perpendicular  line  marks  out  the  three  postal  epochs.  One  period 
prior  to  1863,  the  second  from  the  abolition  of  the  postal  zone  system 
in  1863  down  to  the  adoption  of  the  one-cent-a-pound  periodical  post- 
age in  1885,  and  the  third,  from  1885  to  1917,  since  the  periodical  one- 
cent-a-pound  rate  has  been  in  operation. 

This  chart  clearly  evidences  that  the  heaviest  deficits  occurred  in 
those  periods  in  which  the  postal  service  was  restricted,  and  when  its 
benefits  were  reserved,  through  the  postal  zones  and  high  charges  to 
patrons — to  the  wealthier  and  already  highly  educated  classes.* 

It  is  distinctly  to  be  noted  that  postal  progress  has  developed  since 
1837  in  three  unmistakably  marked  epochs; 

One,  the  period  prior  to  1863,  when  the  postal-zone  system  was 
abolished. 

Second,  from  the  abolition  of  the  postal-zone  system,  in  1863,  to  the 
adoption  of  the  cent-a-pound  periodical  postage,  in  1885. 

Third,  from  1885  to  the  present  day. 

There  has  been  a  smaller  average  percentage  deficit  in  this  last  period 
than  ever  before  in  the  history  of  the  Post  Office  Department,  culminat- 
ing in  the  unprecedented  succession  of  surpluses  from  1913  up  to  1917, 
when  it  was  over  $12,000,000  and  over  119,900,000  in  1918.  Postmaster 
General  Burleson  has  attributed  the  only  break  in  this  succession  of 
postal  surpluses  to  the  disturbed  conditions  of  the  world  war  which 
decreased  the  revenue  $21,000,000.t      • 

Chart  entitled  "Comparison  of  postal  revenues  with  volume  of 
periodical  postal  circulation  from  1885-1917"  gives  in  greater  detail 
the  postal  and  periodical  situation  for  the  years  from  1885,  when  the 
one-cent-a-pound  rate  was  adopted,  up  to  1917,  showing  the  surplus 
and  deficit  and  poundage  of  second  class  mail  for  the  several  years. 

This  chart  is  simply  an  enlargement  of  the  preceding  chart.  It 
illustrates  the  third  epoch  in  postal  history. 

From  1885  the  line  of  deficits  in  the  Postal  Department,  which  is  the 
same  line  as  on  the  preceding  chart,  while  fluctuating  up  and  down  a 
little,  shows  an  upward  trend  of  diminishing  deficits  until  in  1911  the 
period  of  surpluses  begins. 

In  1885,  before  the  periodical  postal  law  became  effective,  the  total 
poundage  of  periodicals  was  1,000,000  pounds,  and  year  by  year  it 
constantly  increased  in  almost  an  exact  ratio  or  parallel  with  the  average 
line  of  diminishing  postal  deficits. 


*The  exceptional  surplus  in  1865,  is  explained  by  the  unusual  conditions  then  pre- 
vailing. 

"Montgomery  Blair,  who  was  Postmaster-General  during  the  administration  of 
Lincoln,  pursued  a  liberal  and  constructive  policy  with  respect  to  the  postal  service. 
Partly  as  a  result  of  the  discontinuance  of  mail  service  in  the  Southern  States,  he 
succeeded  in  greatly  reducing  the  postal  deficit,  and  actually  produced  in  1865 
a  surplus  of  nearly  one  million  dollars. ' ' 

(Roper's  History  of  the  United  States  Post  Office,  page  73.) 

tPostmaster  General's  Report  1915,  page  4 


24  SOME    POSTAL    ECONOMICS 

The  black  line  beginning  at  the  bottom  and  left  hand  corner  of  the 
chart  is  the  line  of  periodical  poundage  showing  second  class  mail 
matter  increases  by  pounds,  beginning  with  1885  when  it  was  101,- 
000,000  pounds.  This  second  class  mail  matter  continues  in  a  con- 
stantly ascending  poundage  with  but  one  period  of  decrease,  in  the 
year  1908,  and  it  then  again  starts  its  upward  trend,  developing  very 
rapidly. 

While  there  is  not  a  great  deal  of  fluctuation  in  this  ascending  curve 
of  periodical  postal  poundage,  yet  what  little  change  there  is  here  and 
there  is  almost  identical  with  the  general  trend  of  the  rise  and  fall  of 
postal  deficits,  as  indicated  by  the  lines  of  deficits  above,  so  that  they 
constitute  substantially  a  parallel  of  rising  poundage  and  decreasing 
postal  deficits,  and  there  is  an  unmistakable  ratio  between  the  two. 

From  1911  to  1917,  the  Post  Office  has  had  more  surplus  years  than 
in  any  other  similar  period  and  these  years  correspond  with  the  years 
when  the  periodical  mail  was  the  greatest  in  the  history  of  the  Post 
Office  Department  and  of  publishing  history! 

This  indicates  clearly  the  constant  ratio  between  periodical  circu- 
lation and  postal  receipts.  And  indicates  too  that  if  it  were  not  for 
periodical  circulation,  the  postal  receipts  would  so  lessen  as  to  consti- 
tute an  additional  and  tremendous  yearly  postal  deficit  to  be  met  out 
of  the  General  Treasury. 

Observe  the  line  of  postal  deficits  and  periodical  circulations  from 
1905.  You  will  notice  that  almost  in  an  exact  ratio  as  periodical 
circulation  goes  up,  so  does  the  postal  deficits  decrease,  and  that  in 
1907  when  periodical  poundage  decreased,  so  also  did  the  deficit  in  the 
Post  Office  Department  concurrently  increase,  and  that  from  1909 
the  deficits  again  decreased  as  the  poundage  grew;  and  that  as  the 
periodical  poundage  fell  off  in  1912,  so  was  there  again  estabhshed  a 
deficit  in  the  Postal  Department  as  against  a  surplus  for  the  preceding 
year. 

The  relation  between  the  volume  of  periodical  circulation  and  the 
deficits  and  surplus  in  the  Post  Office,  is  too  striking  to  be  ignored.  It 
not  only  illustrates  but  in  the  illustrating  proves  a  vital  relationship 
between  the  two. 

And  a  further  illuminating  fact  in  the  relation  of  increasing  periodical 
circulation  to  decreased  postal  deficits  is  that  the  rural  free  delivery 
was  established  in  1896.  It  is  one  of  the  most  expensive  services  in 
the  Post  Office  and  its  cost  in  1917  was  over  $52,000,000  and  it  has 
not  directly  returned  one  cent  of  revenue.  Yet  despite  this  tremen- 
dous increase  through  the  adoption  of  the  rural  free  delivery,  the  Post 
Office  deficits  continue  to  diminish  in  the  same  fairly  even  ratio  with 
increasing  periodical  circulation.  Periodical  circulation  alone  is  the 
one  factor  that  can  be  credited  with  the  stimulation  necessary  to 
absorb  this  tremendous  expense  of  the  rural  free  delivery. 

To  refer  once  again  to  these  allegations  that  periodicals  cause  a 
loss  and  are  responsible  for  bookkeeping  deficits  in  the  Post  Office,  the 
reader  is  referred  to  the  Chart  entitled  "Post  Office  receipts  and 
expenditures  compared  with  magazine  circulations  in  each  State." 


25 


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26  SOME    POSTAL    ECONOMICS 

The  broken  line  indicates  postal  deficit  or  surplus  for  each  particular 
State.  The  States  are  not  arranged  alphabetically,  but  according  to 
the  order  of  their  constantly  decreasing  deficit  by  States,  and  on  up 
into  the  States  that  have  the  surpluses.  The  portion  shaded  in  "stipple" 
indicates  the  portion  by  which  the  States  can  be  identified  that  show  a 
postal  surplus. 

South  Carolina  shows  the  greatest  difference  between  postal  ex- 
penditures and  postal  receipts,  and  so  on  up  with  a  decreasing  deficit 
over  expenditures  until  we  reach  Oregon,  which  shows  an  almost  even 
balance  between  postal  expenditures  and  postal  receipts. 

From  Oregon  on,  this  broken  line  shows,  since  it  passes  above  and 
into  the  "  stipple  "  portion,  a  surplus. 

The  solid  black  line  shows  the  circulation  of  periodicals  per  issue  for 
each  100  inhabitants  of  each  State.  It  would  be  manifestly  unfair  to 
compare  circulation  of  periodicals  by  States  without  regard  to  their 
populations,  so  that  the  results  have  been  tabulated  from  the  number 
of  copies  of  magazines  per  issue,  compared  with  100  inhabitants  of  each 
particular  State. 

Magazine  circulation  by  States  is  known  only  to  the  periodicals 
themselves,  or  possibly  by  the  post  office.  If  the  post  office  knows  it, 
it  never  has  published  that  fact.  This  exhibit  is  prepared  from  data 
supplied  by  the  publishers  of  the  several  publications.  It  comprises 
12  weekly  periodicals,  with  a  total  circulation  of  4,800,000  copies  per 
issue,  and  19  monthly  periodicals,  with  a  total  circulation  of  8,273,000 
copies  per  issue.* 

These  magazine  circulations  per  100  inhabitants  are  placed  in  com- 
parison with  the  postal  deficits  or  surpluses  of  the  respective  States. 
While  the  per  capita  circulation  of  the  periodicals  varies  in  a  zigzag 
line,  it  is  perfectly  apparent  that  there  is  a  continual  upward  trend  of  the 
average  direction  of  the  magazine-circulation  line.  And  that  those 
States  having  the  lowest  circulation  per  100  inhabitants  have,  in  general, 
the  greatest  postal  deficits;  while  those  States,  on  the  contrary,  which 
have  the  greatest  volume  of  periodical  circulation  per  100  inhabitants 
have  the  lowest  deficits  or  the  greatest  surpluses. 

If  it  is  true  that  the  cost  of  delivering  magazines  is  a  heavy  burden 
upon  the  post  office,  it  must  absolutely  follow  that  those  States  which 
have  the  greatest  volume  of  periodicals  to  distribute  per  100  inhabi- 


*The  following  weekly  periodicals  were  taken  because  considered  fairly  representa- 
tive of  their  class  of  publication :  The  Country  Gentleman,  the  Saturday  Evening 
Post,  Leslie's  Illustrated  Weekly,  .Judge,  Collier's,  the  Continent,  the  Scientific  Amer- 
ican, Life,  Every  Week,  All  Story  Weekly,  the  Argosy,  and  the  Outlook.  They  are 
magazines  that  range  from  the  religious  to  the  humorous,  the  scientific,  and  general, 
to  those  without  political  complexion  to  those  having  political  complexion.  It  is  a 
general  compilation. 

The  monthlies  were  The  Ladies'  Home  Journal,  the  Popular  Science  Monthly, 
Scribner's  Magazine,  Outing,  the  Illustrated  World,  the  Manual  Training  Magazine, 
the  American  Magazine,  the  American  Review  of  Reviews,  Comfort,  the  Modern 
Priscilla,  Current  Opinion,  the  Woman's  Home  Companion,  McClure's  Magazine, 
Snappy  Stories,  the  Railroad  Man's  Magazine,  the  Pictorial  Review,  the  Expositor, 
Current  Anecdote,  Mimsey's  Magazine,  and  Live  Stories;  running  throughout  the 
gamut  of  the  publications,  and  representing  publications  of  every  shade  and  charac^ter. 
(Appendix  D.) 


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SOME    POSTAL    ECONOMICS  29 

tants  must  have  the  greatest  deficits.  New  York,  which  is  one  of  the 
eastern  pubhshing  centers,  has  a  circulation  of  14.4  periodicals  per 
100  inhabitants;  it  has  a  heavy  magazine  circulation.  The  New 
York  State  postal  service  has  throughout  the  State  the  same  burden 
of  cost  for  delivering  these  periodicals  as  has  any  other  State;  but 
we  may  ignore  this  feature  for  the  moment  and  take  that  State  which 
is  farthest  away  from  New  York  State,  and  hence  would  show,  naturally, 
the  heaviest  charge  for  distribution  and  delivery.  Let  us  take  Cali- 
fornia as  a  State  most  remote  and  having  large  areas  of  extremely 
sparse  populations. 

This  chart  shows  that  Cahfornia  has  27.5  magazines  per  100  of 
population  and  should,  according  to  the  logic  of  the  postal  "zones" 
advocates,  show  a  postal  deficit.  But  we  find  that  California  shows  a 
postal  surplus  over  its  postal  expenses  of  over  28  per  cent. 

We  find  further  that  Montana,  a  State  which  certainly  can  not  have 
a  low  cost  postal  delivery  system,  has  a  circulation  of  31.2  magazines 
per  100  of  population,  which  should  have  given  them  a  scandalous  deficit, 
and,  on  the  contrary,  we  find  that  Montana  has  a  postal  surplus  of 
over  27  per  cent. 

And  so  through  the  other  States  in  the  same  way  we  find  that  there 
is  a  consistent  relation  between  these  highly  significant  facts. 

The  next  chart  illustrates  the  postal  principles  of  Canada,  whose  rate 
is  one  quarter  of  our  rate  for  periodicals,  namely,  one-fourth  of  one- 
cent  per  pound;  that  the  Canadian  post  office  sends  a  magazine  all 
over  the  world,  to  the  British  possessions,  at  a  flat  rate  of  one-fourth 
of  one  cent  a  pound,  while  our  rate  for  periodicals,  identical  in  character, 
shipped  from  New  York  west  of  Colorado  is  an  aggregate  of  6  to  9 
cents  a  pound.  Further,  the  Canadian  post  office  raised  postal  rates 
on  all  classes  of  postal  matter  as  a  war  measure  but  retained  the  one- 
fourth-of-one-cent  a  pound-rate  on  periodicals  in  order  that  the  accessi- 
bility of  reading  matter  during  the  great  world  war  should  not  be 
restricted. 

There  are  in  the  figures  furnished  in  the  report  of  the  Postmaster 
General  some  very  definite  indications  of  the  postal  cost  of  period- 
ical mail.  In  his  report*  we  find  that  the  total  shipments  of 
periodicals  by  freight  during  the  year  1917  consisted  of  over  4,300 
carloads,  weighing  over  127,000,000  pounds— not  a  mere  laboratory 
experiment  in  postal  efficiency  but  an  actual  practice  of  over  12  per 
cent  of  the  total  volume  of  periodical  circulation — and  he  stated  that 
this  poundage  was  transported  at  a  cost  of  a  very  close  approximation 
of  one-half  a  cent  per  pound.  This,  therefore,  gives  us  one  definite 
factor. 

In  the  second  place,  in  the  same  report  of  the  Postmaster  General 
for  1917,  (page  107)  we  find  that  the  average  cost  of  delivering  on  the 
Rural  Free  Delivery  System — the  most  expensive  system  in  the  Post 
Office— is  $0.0144  per  piece,  whether  it  be  a  post  card,  a  6-pound 
book  or  a  20-pound  parcel-post  package.  Add  to  this  one-half  cent 
for  the  proven  cost  of  the  railway  transportation  and  we  have  a  total 
cost  of  less  than  2  cents  for  the  transportation  and  delivery  of  a  pound 


*Postmaster  General's  Report,  1917,  p.  IS. 


30  SOME    POSTAL    ECONOMICS 

periodical — at  the  most  expensive  postal  delivery  system  in  the  depart- 
ment and  on  the  latest  official  figures  of  the  Post  Office  Department 
itself. 

If  it  costs  but  $0.0144  to  deliver  a  pound  magazine  over  the  most 
expensive  Rural  Free  Delivery  System,  how  much  less  must  it  cost 
to  deliver  a  pound  magazine  by  city  or  village  delivery? 

The  Rural  Free  Delivery  is  admittedly  the  most  expensive  delivery 
system  in  the  department;  but  in  the  issue  of  the  Congressional  Record 
of  March  23,  1918,  there  is  a  record  of  the  appearance  of  the  Fourth 
Assistant  Postmaster  General,  J.  I.  Blakslee,  before  the  House  Com- 
mittee on  Post  Office  and  Post  Roads  who  urged  the  extension  of  the 
Rural  Free  DeHvery  System  and  that  it  should  include  in  its  service 
the  collection  and  delivery  of  farm  produce,  butter,  cheese,  chickens, 
eggs,  honey,  nuts,  apples  or  spare  ribs.  He  stated  in  his  official  argument 
that  the  Post  Office  could  include  farm  produce,  its  collection,  transporta- 
tion, and  delivery,  and  increase  the  rural  free  delivery  routes  up  to 
100  miles  and  still  make  a  profit  at  the  postal  charge  of  one-half  cent 
per  pound.  This  is  an  official  statement  from  a  responsible  official  of 
the  Post  Office  Department  itself. 

It  is  to  be  borne  in  mind  that  these  spare  ribs,  these  packages  of 
eggs  and  of  butter,  and  jars  of  honey  are  perishable,  fragile,  and  irregu- 
lar in  size  and  weight  and  not  easily  handled  or  sorted.  In  the  light 
of  this  official  postal  fact — and  the  latest  available — it  is  obviously 
unsound  to  argue  that  a  neat,  clean,  easily  handled  magazine  weighing 
a  pound,  or  less  or  more,  can  not  be  transported  and  delivered  as  cheaply 
as  a  leg  of  mutton  or  a  half  dozen  eggs. 

And  there  is  the  further  fact  of  the -custom  of  the  Post  Office  Depart- 
ment, in  which  they  have  had  the  cordial  cooperation  of  all  publishers 
for  years,  that  the  publishers  themselves  sack,  sort,  route,  and  deliver 
to  the  cars,  or  wherever  directed  by  the  postal  authorities,  the  perio- 
dicals ;  so  that  the  first  expense  or  act  that  the  post  office  performs  is  the 
sealing  of  the  car  or  the  checking  of  the  receipt  of  the  sack  of  periodicals. 

Second  cla^s  mail  is  carried  at  a  profit  to  the  department,  and  this 
can  be  proven  by  the  business  tests  of  any  great  public  utility  or  public 
service  corporation.  Every  public  service  corporation  has  to  be 
prepared  to  supply  wha;fc  is  known  as  the  "peak  load."  This  maxi- 
mum service  requires  a  huge  organization  in  an  instant  state  of 
efficiency.  Between  the  periods  of  the  "peak"  any  business  will  be 
profitable  even  at  a  much  lower  charge  that  can  be  served  by  what  would 
otherwise  be  idleness  and  total  loss.  This  will  easily  illustrate  itself  if 
you  will  imagine  all  second-class  mail  as  nonexisting.  How  many  postal 
employees  could  be  dismissed  from  the  Postal  Service  if  there  were  no 
periodicals  to  handle.  Very  few — too  few  to  make  it  worth  while  under 
any  theory.  It  is  the  needs,  of  first  class  mail  that  has  to  be  provided 
for.  A  microscopic  saving,  when  considered  as  a  part  of  the  whole  vast 
system  of  postal  employees  in  the  department  is  not  a  factor.* 


*"Altho  mail  is  collected  from  street  boxes  and  is  deposited  in  the  post  office 
"drops"  continuously  throughout  the  day,  it  is  not  until  the  late  afternoon  hours 
that  the  vast  quantities  are  received.     The  work  of  the  average  business  concern 


SOME    POSTAL    ECONOMICS  31 

It  is  known  and  recognized  as  a  principlef  of  business  economics  that 
every  corporation — public  service  and  utility  corporation — has  to  be 
prepared  to  supply  service  during  what  is  known  as  the  peak  load  due 
to  the  maximum  demand.  That  is  recognized  by  all  service  companies, 
and  they  have  to  be  prepared  for  that  condition.  But  there  are  periods 
of  slack  between  these  times  of  peak  load  service.  What  is  charged 
for  in  that  period  of  slack  is  not  charged  for  on  the  same  basis  as  that 
which  is  carried  for  the  peak  load  period.  J  The  Post  Office  Department, 
when  they  increase  the  letter  carriers  in  a  city,  do  so  as  a  result  gener- 
ally of  applications  from  business  bodies  in  the  city  or  community, 
suggesting  that  they  need  more  frequent  deliveries.  They  do  not  say 
"We  need  the  magazines  more  frequently,  we  need  one  at  9  o'clock, 
and  another  at  10  o'clock,  and  another  at  11  o'clock,  or  half-past  11." 
They  say  "We  have  to  have  our  mail,"  and  that  means  the  business 
mail;  that  is  what  they  mean.  It  is  very  rarely,  and  only  on  occasions 
like  Christmas  time,  that  the  letter  carriers  carry  their  maximum  ca- 
pacity. What  does  the  carrier  take  out  on  the  first  trip?  What  he 
takes  is  the  first-class  mail ;  and  what  does  he  leave  behind?     He  leaves 


is  organized  so  that  the  dispatching  of  the  mail  is  the  last  thing  to  be  done  each  day. 
As  a  consequence  miUions  of  pieces  of  mail  are  dumped  into  post  offices  between 
the  hours  of  4  and  8  P.M.  every  day.  This  mail  must  be  postmarked,  sorted, 
and  despatched  within  the  briefest  possible  time  so  that  outgoing  mail  may  be  put 
on  trains  that  will  take  it  to  destination  in  time  for  the  first  possible  delivery  and 
so  that  local  mail  mav  be  prepared  for  the  next  morning's  delivery. " 
{History  of  The  United  States  Post  Office,  Roper.  1917,  pp.  11.5-16.) 

t"  When  any  large  plant  is  used  for  diverse  products,  the  case  is  so  far  one  of  pro- 
duction at  joint  cost.  So  it  is  with  the  railway.  The  same  road-bed  is  used  for 
passengers  and  freight.  If  the  outlay  for  plant  were  the  only  expense  incurred  in 
rendering  the  service,  the  case  would  be  completely  one  of  joint  cost.  There  are, 
of  course,  the  operating  expenses  in  addition.  But  the  expense  of  the  plant  (repre- 
sented chiefly  by  interest  on  the  investment)  forms  an  unusually  large  part  of  the 
total  cost  of  transportation.  *  *  *  AH  such  expenses  serve,  for  example,  equally 
for  passengers  and  freight,  and  cannot  be  said  to  be  incurred  specifically  for  either, 
or  to  be  separable  as  expense  for  one  or  the  other.  *  *  *  for  each  train  by  itself 
there  is  one  cost,  joint  for  all  that  it  carries. 

The  same  situation  is  even  more  obviously  present  in  passenger  service.  Passenger 
trains  must  run  on  their  schedule  time.  Their  expense  is  substantially  the  same 
whether  the  cars  be  full  or  empty,  whether  they  have  the  maximum  number  of  cars 
an  engine  can  haul,  or  only  half  or  a  third  of  that  number.  *  *  *  a.  mail  car, 
excursion  car,  sleeping  car,  private  car,  attached  to  a  regular  passenger  train  involves 
no  additional  expense;  the  whole  train  is  operated  at  one  joint  cost.  On  European 
railways,  first-class,  second-class,  and  third-class  carriages  commonly  form  part  of 
the  train,  and  are  operated  at  one  joint  expense  for  the  train  as  a  whole.  The 
apportionment  of  charges  among  the  different  classes  of  passengers  proceeds  (in  a 
rough  way)  on  that  basis  of  utility  or  demand,  which,  as  has  been  shown,  comi- 
nates    where    cost   is    joint."        {Principles  of  Economics,    Taussig,    Page   371.) 

|"Some  items  of  traffic  will  "stand"  a  heavier  charge  than  others;  that  is,  they 
will  continue  to  be  offered  even  though  the  transportation  charge  be  high.  Other 
items  will  "stand"  only  a  low  charge;  that  is,  they  will  not  come  unless  the  charge 
be  low  *  *  *  Railways  in  all  countries  whether  under  public  or  under  private 
management,  habitually  charge  less  per  ton  mile  on  cheap  bulky  articles  than  on 
articles  having  high  value  per  unit  weight.  Thus  coal,  ores,  lumber,  are  "low-class" 
articles,  on  which  rates  are  relatively  low;  textiles  and  groceries  are  "high-class" 
articles,  and  on  them  rates  are  high.  The  coal,  ores,  lumber,  will  not  be  offered 
for  transportation  unless  rates  be  low;  the  traffic  will  bear  no  more.  The  textiles 
and  groceries  will  be  offered  even  though  the  charge  be  relatively  high;  the  traffic 
will  bear  it  *  *  *  Where  both  kinds  of  commodities  are  carried  on  one  and  the 
same  train,  there  are  virtually  no  separable  expenses  for  either.  Barring  such 
items  as  loading  and  unloading,  all  the  expense  is  joint,  and  the  principle  of  joint 
cost  has  full  play."  {Principles  of  Economics,  Taussig,  Page  371.) 


32  SOME    POSTAL    ECONOMICS 

the  magazines.  And  when  he  comes  back  and  starts  out  on  the  second 
trip,  if  he  still  finds  enough  first-class  mail  to  deliver  on  that  trip  he 
leaves  the  magazines.  He  does  not  deliver  the  magazines  until  he 
has  not  enough  first-class  mail  to  make  up  the  capacity  of  his  trip. 

But  this  whole  question  of  figures — referred  to  simply  in  order  to  point 
out  some  of  the  characteristic  absurdities  in  the  allegations  of  those  who 
have  supported  the  postal  "zone"  system  on  the  frequently  quoted 
and  absurd  theory*  that  it  costs  the  Post  Office  9  cents  a  pound  to 
handle  periodicals — is  not  vital  nor  the  controlling  consideration.  The 
reestablishment  of  the  postal  "zone"  system  turns  back  the  clock  of 
postal  progress  55  years  and  throws  overboard  all  the  recommendations 
of  the  greatest  American  statesmen,  from  George  Washington  to 
President  Wilson. 

This  postal  "zone"  law  is  a  slightly  disguised,  discriminatory  tax 
upon  advertising.  It  discriminates  against  national  periodicals  and 
their  advertising  pages  through  excessive  postal  charges  and  in  favor 
of  publications  of  local  circulation,  upon  which  is  laid  not  one  cent  of 
postage  charge  or  advertising  tax. 

This  postal  "zone"  law  is  unsound,  unfair,  discriminatory,  and  should 
be  repealed.  It  is  socially  destructive  and  economically  destructive 
of  progress  and  better  citizenship  throughout  the  Nation.  President 
Wilson,  when  a  socially  destructive  postage  increase  law  was  being 
urged,  stated: 

It  must  be  that  those  who  are  proposing  this  change  of  rates  (magazine  postage  rate 
increase)  do  not  comprehend  the  effect  it  would  have.  A  tax  upon  the  business  of 
the  more  widely  circulated  magazines  and  periodicals  would  be  a  tax  upon  their 
means  of  living  and  performing  their  functions. 

They  obtain  their  circulation  by  their  direct  appeal  to  the  popular  thought. 
Their  circulation  attracts  advertisers.  Their  advertisements  enable  them  to  pay 
their  writers  and  to  enlarge  their  enterprise  and  influence. 

This  proposed  new  postal  rate  would  be  a  direct  tax,  and  a  very  serious  one,  upon 
the  formation  and  expression  of  opinion — its  more  deliberate  formation  and  expres- 
sion— just  at  a  time  when  opinion  is  concerning  itself  actively  and  effectively  with 
the  deepest  problems  of  our  politics  and  our  social  life. 

To  make  such  a  change  now,  whatever  its  intentions  in  the  minds  of  those  who 
propose  it,  would  be  to  attack  and  embarrass  the  free  processes  of  opinion. 

Surely,  sober  second  thought  will  prevent  any  such  mischievous  blunder. 

No  safe,  sane,  and  sound  postal  legislation  can  be  attempted  until  the 
function  and  relation  of  the  Postal  Service  to  the  people  is  determined. 
If  the  Post  Office  Department  is  to  be  commercialized  and  is  no  wise 
different  from  a  commercial  institution,  and  that  the  postal  policy 
established  in  the  last  one  hundred  years  is  to  be  abrogated,  it  should 
be  done  only  after  definite  investigation  and  enunciation  of  new  prin- 
ciples by  a  competent  commission. 


*The  Hughes  Postal  Commission  after  careful  investigation  reported  that  the 
evidence  submitted  by  the  Post  Office  authorities  did  "not  justify  a  finding  of  the 
total  cost  of  transporting  and  handling  the  different  classes  of  second  class  mail 
matter,  {Message  of  the  President  transmitting  the  Annual  Report  of  the  Postmaster 
General  for  1911 — and  Report  of  the  Commission  on  Second-class  matter,  page  137.") 
In  fact  in  one  statistical  table  submitted  by  the  Post  Office  the  "total  expense" 
of  one  division  of  second  class  mail  was  given  as  less  than  the  overhead  allotted  to  it 
and  all  other  second-class  mail!     (See  Appendix  C.) 


AMERICAN  BUSINESS  AND  ZONE  POSTAL  RATES 

By 

Jesse  H.  Neal,  Executive  Secretary. 

The  Associated  Business  Papers  Inc.,  and  Director  U.  S.  Division  of 

Advertising. 

AN  ARGUMENT   FOR    REPEAL    OF    POSTAL    ZONE    LAW    BEFORE    THE   WAYS 

AND  MEANS  COMMITTEE  OF   THE    HOUSE    OF  REPRESENTATIVES, 

JULY  12,   1918,  REVISED  DECEMBER,    1918. 

I  represent  a  branch  of  the  pubUshing  business  which  for  some  reason 
is  seldom  referred  to  in  postal  discussions.  The  custom  has  been  to 
refer  to  newspapers  and  magazines,  and  the  term  magazines  is  under- 
stood by  most  people  to  signify  the  larger  and  better-known  publications, 
such  as  you  see  upon  the  news  stands,  but  there  are  in  the  United  States 
hundreds  upon  hundreds  of  valuable  and  necessary  periodicals  which 
can  not  be  classed  either  as  newspapers  or  magazines. 

For  instance,  we  have  nearly  200  papers  devoted  to  the  subject  of 
education.  I  will  mention  just  a  few  of  the  numerous  classifications 
in  which  you  will  find  many  worthy  publications  of  moderate  size 
performing  very  useful  service.  Among  these  I  note  papers  going  to 
officials  and  employees  in  fire  and  police  departments,  publications 
dealing  with  forestry  and  irrigation,  hygiene  and  sanitation,  labor 
publications,  law  periodicals,  papers  for  boys  and  girls,  pubhcations 
covering  philanthropic  and  humanitarian  subjects,  scientific  subjects, 
Sunday  schools,  and  many  other  religious  and  denominational  pubh- 
cations. You  will  also  find  10  periodicals  in  raised  type  for  the  blind. 
You  will  find,  too,  12  progressive  pubhcations  going  to  the  Indians 
and  which  are  doing  much  to  make  good  citizens  and  good  Indians 
out  of  our  North  American  aborigines. 

BUSINESS    PRESS    IMPORTANT   TO    INDUSTRY 

This  is  wholly  aside  from  the  particular  publications  which  I  per- 
sonally represent.  These  business  papers,  or  possibly  you  are  accus- 
tomed to  call  them  trade  papers,  play  an  essential  part  in  the  daily 
life  of  merchants,  manufacturers,  engineers,  miners,  captains  of  indus- 
try, shipyards,  steel  mills,  chemical  plants,  the  coal  industry,  aviation 
factories,  textile  mills,  etc.  Yet  they  form  less  than  4  per  cent  of 
the  total  volume  of  second-class  mail.  No  matter  how  widely  sepa- 
rated are  the  units  of  any  business  or  industry,  the  paper  serving 
that  field  unites  them  all  together  into  one  closely  connected  group. 

Every  one  of  the  munitions  used  upon  the  battle  field  or  behind  the 
lines — the  artillery,  the  machine  guns,  the  rifles,  the  ambulances,  the 


34  SOME    POSTAL    ECONOMICS 

clothing,  the  ammunition,  the  railroads,  the  airplanes,  the  gas  masks, 
the  motor  transports,  etc. — are  all  products  of  men  who  read  trade 
and  technical  papers.  You  will  not  find  an  engineer  engaged  in  the 
creation  of  any  of  the  huge  commercial  or  military  projects  who  does 
not  read  and  depend  upon  one  or  more  engineering  papers  for  news, 
for  inspiration,  and  for  continuous  education  in  his  line  of  work. 

All  trade  and  industry  to-day,  gentlemen,  is  in  a  state  of  flux  and 
of  change,  and  did  we  lack  the  established  channels  of  information 
furnished  by  our  trade  and  technical  press,  it  is  not  too  much  to  say 
that  a  state  of  utter  chaos  would  prevail  in  many  of  our  most  impor- 
tant industries. 

Important  as  these  papers  are  in  ordinary  conditions,  they  have 
become  in  war  conditions  only  less  essential  than  coal  and  transporta- 
tion. Speeding  up  production  beyond  limits  ever  dreamed  of  is  one 
of  the  most  important  features  of  our  war  program.  This  is  only 
one  of  the  high  functions  of  the  business  press. 

NECESSITIES    OF    PRESS,    PUBLIC   NECESSITIES 

The  Senate  Committee  on  Printing  wrote  with  a  pen  inspired  by 
truth  and  the  spirit  of  Americanism  when  they  said,  a  few  months 
ago: 

To  jeopardize  the  existence  of  the  press  is  to  imperil  the  Hfe  of  the  Government 
itself,  so  dependent  is  a  democracy  upon  the  prompt  and  widespread  information  of 
its  people.  Therefore  whatever  affects  the  publication  of  its  newspapers  and  peri- 
odicals likewise  affects  the  welfare  of  the  Government,  and  the  necessities  of  such 
publications  become  in  fact  puljlic  necessities. 

Let  me  digress  for  a  minute  from  this  discussion  of  the  war  function 
of  business  papers  and  call  your  attention  to  the  place  they  occupy 
in  the  home  towns  and  cities  of  every  gentleman  in  this  room.  You 
will  find  that  every  business  house  in  your  community  takes  a  so-called 
trade  paper,  and  this  applies  to  the  automobile  man,  the  banker,  the 
blacksmith,  the  man  in  the  brickyard,  the  butcher,  the  cotton  buyer, 
the  cement  mill,  the  clothing  store,  the  creamery,  the  dentist,  the 
drug  store,  the  dry  goods  store,  the  electric  shop,  the  implement  man, 
the  flour  mill,  grocery  and  hardware  stores,  the  hotel,  the  laundry, 
the  lumber  yard,  the  jewelry  store,  the  plumbing  shop,  your  printer, 
the  shoe  store,  the  telephone  man,  and  your  undertaker,  not  forgetting 
the  hospital,  the  doctor,  and  your  municipal  officials.  You  will  par- 
don this  cataloguing  of  names.  I  do  not  want  to  be  tedious,  but  I 
do  feel  under  the  necessity  of  impressing  upon  you  the  variety  and 
importance  of  the  interests  that  are  indissolubly  linked  np  with  these 
so-called  trade  papers. 

One  of  the  greatest  problems  of  present  day  existence  is  the  problem 
of  distribution,  the  getting  of  merchandise  from  its  source  to  the 
consumer  cheaply  and  efficiently.  That  problem,  gentlemen,  is  being 
solved  largely  through  the  work  of  the  business  press.  Civilization 
itself  has  advanced  almost  in  exact  proportion  as  we  have  overcome 
the  immobility  of  thought  and  things.  The  business  press  has  been 
compared  to  a  pipe  line  connecting  all  of  the  units  in  each  field,  so 
that  each  receives  in  proportion  to  its  need  all  necessary  trade  infor- 
mation, instruction,  and  advice. 

The  advertising  in  trade  and  technical  papers  is  just  as  essential 
as  the  reading  matter  to  the  various  fields  of  industry  reached  by 


SOME    POSTAL    ECONOMICS  35 

ADVERTISING    ESSENTIAL   TO    INDUSTRY 

these  ])ap('rs;  in  fact,  th(>  readers  demand  the  kind  of  service  that  is 
rtnidered  through  the  advertising  pages,  and  it  would  be  impossible 
to  build  a  subscription  clientele  of  any  size  or  permanency  without 
a  representative  volume  of  clean,  well-written  advertising.  Many 
business  papers  lay  particular  emphasis  upon  the  character  of  their 
advertising  in  presenting  the  advantages  of  their  papers  to  pro- 
spective subscribers. 

A  story  about  new  materials,  new  processes  or  new  appliances 
can  be  used  only  once  in  the  editorial  columns  as  news.  Any  repeti- 
tion of  the  story  becomes  advertising,  and  must  be  given  through  the 
advertising  pages. 

It  is  not  human  nature  to  at  once  be  impressed  with  a  new  idea, 
and  many  of  the  most  important  improvements  in  all  branches  of 
industry  have  resulted  solely  from  the  steady  hammering  of  attrac- 
tive and  scientific  advertising  in  business  papers.  These  advertise- 
ments benefit  not  only  the  advertiser,  but  have  an  undoubted  eco- 
nomic value  for  the  entire  industrial  organization  of  the  nation. 

Right  here  I  want  to  correct,  if  I  can,  an  all  too  prevalent  miscon- 
ception of  the  nature  and  function  of  advertising.  I  refer  to  the 
erroneous  belief  that  advertising  is  merely  a  clever  sales  instrument 
which  is  used  by  advertisers  to  obtain  some  special  advantage  for 
themselves  alone.  On  the  contrary,  gentlemen,  I  but  voice  the  belief 
of  our  deepest  thinkers  and  wisest  economists  when  I  say  that  ad- 
vertising is  an  economic  force  in  American  life,  that  should  be  recog- 
nized as  such  by  Congress,  and  given  every  opportunity  to  develop 
to  its  fullest  capacity  for  good. 

ADVERTISING   NOT   AN    EXPENSE 

Advertising  is  not  an  added  expense  to  either  the  seller  or  the 
buyer.  It  is  not  a  luxury  indulged  in  by  wealthy  manufacturers, 
vain  of  their  success  and  desirous  of  puffing  out  their  chests  in  the 
public  prints.  It  is  not  a  device  through  which  unscrupulous  men 
may  put  something  over  upon  unwary  victims.  It  is  none  of  these 
things,  gentlemen,  which  some,  in  perfect  sincerity,  but  in  the  imper- 
fect light  of  their  limited  knowledge,  may  have  claimed. 

What,  then,  is  this  strange  and  wonderful  force  which  is  peculiarly 
an  American  institution,  and  which  has  done  so  much  for  the  Ameri- 
can business?  I  will  tell  you  what  it  is.  It  is  analogous  to  the  type- 
writer, which  emancipated  us  from  the  drudgery  of  handwriting.  It 
is  comparable  to  the  telephone,  the  adding  machine,  the  automatic 
reaper  and  binder,  the  sewing  machine,  and  the  cotton  gin.  It  is  the 
twentieth  century  limited  taking  the  place  of  the  oxcart.  It  is, 
gentlemen,  the  very  quintessence  of  American  inventive  genius  and 
superior  commercial  enterprise. 

All  the  world  comes  to  sit  humbly  at  the  feet  of  America  to  learn  of 
our  achievements  in  the  art  and  science  of  advertising.  Do  you  know 
what  the  national  emblem  is  of  the  associated  advertising  men  of  the 
country?  It  consists  of  just  one  word,  but  it  is  a  word  which  preaches 
sermons  concerning  the  ideals,  and  aspirations  of  the  splendid  body 
of  men  composing  the  advertising  profession.     That  word  is  "Truth." 


36  SOME    POSTAL    ECONOMICS 

I  am  proud  and  glad  of  the  opportunity  of  asking  Congress  to  liesitate 
long  before  it  endangers  this  great  and  beneficent  motive  force  in  Ameri- 
can business,  especially  at  a  time  when  we  need  its  inspiration,  its 
influence  and  dynamic  impulses. 

More  than  any  other  one  force,  modern  advertising  is  responsible 
for  the  prosperity  of  United  States  industry.  The  great  majority  of 
our  improved  manufacturing,  selling,  and  distribution  methods  have 
been  the  outgrowth  of  advertising;  advertising  which  has  scrapped 
obsolete  machinery;  advertising  which  has  standardized  production 
operations;  advertising  which  has  made  better  merchants  and  dis- 
tributors; advertising  which  has  provided  consumer  markets  at  a 
minimum  of  cost.  All  of  this  has  enabled  quantity  production  by 
economical  processes  and  has  enabled  us  to  pay  higher  wages  than 
any  other  country  and  despite  this,  to  compete  in  the  markets  of  the 
world  with  the  low  paid  and  oppressed  workmen  of  less  progressive 
countries. 

CANNOT   SEPARATE   ADVERTISING   AND    EDITORIAL 

At  the  same  time,  the  advertising  revenue  has  built  up  able  trade 
paper  organizations,  which  have  become  not  only  the  channels  but 
the  very  springs  of  higher  industrial  and  trade  education.  As  an  in- 
stance of  what  this  means,  I  will  cite  the  case  of  a  typical  trade  paper 
selling  for  S6  per  year,  which  has  a  net  subscription  income  of  $30,000 
and  which  spends  $85,000  annually  for  editoi'ial  service.  In  papers 
such  as  these  you  can  not  separate  advertising  from  the  editorial  matter, 
because  each  performs  an  indispensible  service  to  trade  and  industry, 
and  each  is  so  dependent  upon  the  other  that,  like  the  Siamese  Twins, 
they  would  die  if  you  separated  them. 

There  is  a  scarcity  of  salesmen  at  the  present  time.  Moreover,  the 
cost  of  traveling  has  increased  tremendously,  but  advertising  has 
come  to  the  rescue  and  is  filling  the  deficiency.  The  existence  of 
this  labor-saving  force  makes  it  possible  for  manufacturers  to  con- 
tinue their  contact  with  the  trade,  even  though  the  field 'force  may 
be  "over  there"  distributing  samples  of  American  shrapnel  to  the 
Huns.  A  prominent  Ohio  manufacturer  of  steel  products  told  me 
that  30  of  his  salesmen  had  enlisted  or  had  been  drafted  into  the 
Army,  but  that  he  could  not  attempt  to  fill  their  places;  he  would 
simply  put  a  little  more  pressure  upon  his  advertising,  hoping  in  that 
way  to  hold  these  jobs  open  for  his  men  until  they  had  returned  from 
the  battle  fields  of  France,  as  he  hoped  they  might. 

Do  you  realize  that  a  page  of  advertising  in  a  business  paper  will 
call  upon  5,000  stores  or  factories  in  one  week,  at  a  total  cost  of 
$50?  To  undertake  the  same  work  with  salesmen  would  require 
100  men  and  an  expense  of  about  $10,000. 

A  few  months  ago  our  Government  commandeered  the  entire  out- 
put of  Bull  Durham  tobacco  for  the  use  of  our  Army  of  Liberty. 
The  famous  Durham  bull  stepped  forth  with  shameless  boldness  from 
the  protecting  shelter  of  that  little  rail  fence  and  went  "over  there" 
for  the  period  of  the  war.  In  the  meantime  advertising  stood  guard 
at  home  over  the  precious  Bull  Durham  good  will. 

In  many  other  like  cases,  advertising  was  the  only  insurance  that  could 
be  taken  out  by  concerns  whose  factories  were  engaged  in  war  work,  to 


SOME    POSTAL    ECONOMICS  37 

maintain  reputations  and  contact  witii  markets  over  against  tiie 
time  when  American  industry  would  again  resume  tiie  arts  and  prac- 
tices of  peace. 

During  the  period  of  the  war,  it  was  ahnost  providential  that  we 
possessed  highly  developed  advertising  skill  and  the  great  public  chan- 
nels of  intercommunication  afforded  by  our  newspapers  and  peri- 
odicals. Without  these  forces  it  would  have  been  impossible  to  have 
made  the  revolutionary  adjustments  in  many  lines  of  business  and 
have  held  the  country  together  acting,  thinking,  and  working  with 
irresistible  unity. 

It  is  to  me  unthinkable  that  Congress  could  knowingly  endanger  now 
through  adverse  legislation  the  fullest  functioning  of  the  American 
press. 

Should  you  happen  to  pick  up  a  trade  paper  serving  any  of  the 
war  industries,  such  as  shipbuilding,  coal  mining,  machinery  pro- 
duction, steel  making,  mining,  hospital  work,  transportation,  or  in 
fact  any  of  the  aUied  war  industries,  I  hope  you  will  bear  in  mind 
that  the  volume  and  character  of  the  advertising  is  the  measure  of 
the  service  they  are  performing. 

I  have  heard  advertising  pages  spoken  of  as  high  priced,  as  a 
species  of  bonanza  which  vomits  forth  nefarious  profits  in  such  volume 
as  to  necessitate  the  restraining  hand  of  burdensome  taxation.  To 
the  average  trade  paper  publisher,  this  is  satire,  pure  and  simple.  In 
the  records  of  the  revenue  office  is  the  best  evidence  as  to  the  absurdity 
of  the  claim  that  the  publishing  business  is  excessively  or  even  fairly 
profitable. 

ADVERTISING    CREATES   INDUSTRIAL   UNITY 

It  is  greatly  to  the  credit  of  our  Government  that  it  has  promoted 
and  encouraged,  through  a  low  flat  rate  of  postage,  the  dissemination 
of  all  this  life-giving  and  necessary  information  throughout  the  land 
without  prejudice  to  any  locality  and  on  an  equal  basis  to  all  men 
regardless  of  their  place  of  residence.  Our  beneficent  postal  system 
of  flat  rates  has  overcome  the  handicap  of  our  magnificent  distances, 
has  obliterated  sectional  lines,  and  has  shortened  the  distance  between 
human  minds,  just  as  certainly  as  the  railroad  has  shortened  the  distance 
between  places. 

We  are  here  to-day  in  protest  against  any  measure,  whether  it  is 
presented  under  the  guise  of  taxation  or  an  adjustment  of  postal  rates, 
which  will  endanger  in  the  slightest  degree  this  vital  and  complex 
system  of  commercial,  industrial,  and  professional  intercourse  which 
has  been  built  up  over  a  long  period  of  years  upon  postal  principles 
that  have  justified  themselves  a  thousand  times  over  in  the  results 
and  benefits  to  the  Nation. 

We  do  not  protest  against  the  payment  of  taxes.  We  ask  merely 
that  you  do  not  institute  postal  laws  which  ^vill  prevent  the  payment 
of  taxes  by  preventing  the  earning  of  profits.  We  are  paying  now 
all  taxes  that  any  business  is  paying,  and  in  fact,  more  taxes  propor- 
tionately than  businesses  of  similar  size. 

Few  concerns  in  any  line  of  business  use  as  much  first-class  postage 
as  do  publishers.  In  our  particular  field,  the  bill  for  first-class  postage 
more  frequently  than  not,  equals  or  exceeds  the  bill  for  second-class 


38  SOME    POSTAL    ECONOMICS 

postage.  We  are  paying  the  extra  cent  on  letters  without  protest, 
because  it  is  frankly  a  tax  and  will  be  discontinued  at  the  close  of  the 
war. 

We  are  paying  our  income  taxes,  our  surplus  taxes,  our  corporation 
taxes,  all  of  them  cheerfully  and  gladly.  Moreover,  we  are  cooperat- 
ing with  the  Government  in  helping  them  to  administer  and  collect 
the  complicated  taxes  imposed  on  the  present  revenue  bill. 

Commissioner  Roper  has  on  several  occasions  expressed  the  obli- 
gation that  he  is  under  to  the  press  for  aiding  them  to  make  collections 
of  the  taxes  under  the  present  revenue  bill. 

We  ask  no  exception  on  that  score,  but  we  submit,  and  I  hope  to 
demonstrate  that  our  relations  to  industry;  yes,  and  our  relation  to 
Government  itself  is  such  that  we  should  not  be  called  upon  to  pay 
an  extra  tax,  a  supertax,  or,  what  some  of  our  publishers  have  re- 
garded as  punitive  damages  for  wrongs,  real  or  fancied,  which  may 
have  been  suffered  by  public  men  at  the  hands  of  the  more  popular 
mediums  of  thought. 

SUBSIDY    CHARGE   RIDICULOUS 

The  charge  has  been  made  that  we,  the  publishers,  have  been  enjoying 
a  subsidy  at  the  hands  of  the  Government,  and  that  we  must  now  be 
made  to  disgorge  and  to  pay  a  prohibitive  postal  rate  in  the  future. 
To  that  charge  we  take  emphatic  exception.  A  low  transportation 
charge  on  intelligence  is  no  more  of  a  subsidy  to  the  publisher  than  a 
low  freight  rate  on  wheat  is  a  subsidy  to  the  farmer.  It  is  no  more  of 
a  subsidy  to  the  publisher  than  the  money  spent  on  public  highways 
is  a  subsidy  to  vehicle  owners. 

If  you,  in  your  wisdom,  should  decide  to  place  an  extra  tax  upon 
the  coal  producers,  would  you  set  about  it  by  raising  the  freight  rate 
on  coal?  Obviously  the  only  effect  would  be  to  contract  the  area 
over  which  the  coal  could  be  shipped  and  to  increase  the  price  to  the 
consumers  within  that  district. 

The  converse  of  this  proposition  is  necessarily  true — that  a  low 
freight  rate  is  obviously  of  primary  benefit  to  consumers. 

You  annually  appropriate  millions  of  dollars  to  maintain  navigable 
streams.  Do  you  do  this  for  the  benefit  of  the  navigation  companies 
which  operate  boats  for  a  profit,  or  is  it  in  the  interest  of  the  national 
welfare  to  maintain  every  possible  channel  of  intercommunication. 

It  is  not  a  question  of  a  Government  bounty  to  publishers,  if  indeed 
there  is  a  loss  on  second-class  service,  but  it  is  a  question  as  to  whether 
you  shall  continue  our  long  established  policy  of  making  it  easy  and 
inexpensive  to  disseminate  knowledge,  literature,  news,  merchandising 
information,  and  current  scientific,  technical,  and  professional  literature. 
It  is  a  matter  largely  between  Congress  and  the  American  people,  and 
if  I  mistake  not,  it  is  the  voice  of  the  people  which  will  determine  this 
question  in  the  end. 

OPINIONS   OF   PROMINENT   MEN 

I  want  to  say,  in  passing,  that  there  are  few  issues  before  the  American 
people  to-day  of  greater  moment  to  our  whole  social  and  industrial 
fabric  than  this  question  of  zone  postal  rates. 


SOME    POSTAL    ECONOMICS  39 

In  this  opinion  I  do  not  stand  alone.  Let  me  fortify  this  state- 
ment with  a  few  excerpts  from  recent  interviews  with  well-known 
men  on  this  question  of  zone  rates : 

George  W.  Wickersham,  former  Attorney  General  of  the  United  States:  There 
should  be  no  law  against  limiting  intelligence.  I  mean  that  there  should  be  no  em- 
bargo on  sane  intelligence.  It  is  against  the  public  interests.  The  people  are  enti- 
tled to  all  the  truthful  information  they  can  get.     In  this  way  they  are  educated. 

Prof.  Charles  Austin  Beard,  formerly  professor  of  political  economy  of  Columbia 
University  and  now  associated  with  the  Bureau  of  Municipal  Research:  The  whole 
spirit  of  the  new  postal  zoning  law  is  contrary  to  the  principles  on  which  our  Govern- 
ment was  founded.  Jefferson,  more  than  a  hundred  years  ago,  pronmlgated  the 
theory  that  newspapers  and  periodicals  were  essential  to  the  success  of  our  democracy. 

It  is  wrong  in  spirit  and  wrong  in  theory  to  hamjjer  the  national  development  of  the 
country.  It  will  result  in  sectional  feeling,  and  will  aid  in  destroying  our  national 
unity.  It  is  particularly  obnoxious  at  this  time  when  the  people  of  the  country, 
east,  north,  south  and  west,  should  be  blended  together  with  a  common  purpose. 

Newcomb  Carlton,  president  of  the  Western  Union  Telegraph:  It  seems  to  me, 
from  the  standpoint  of  constructive  criticism,  that  the  mail  zone  measure  should  be 
repealed  and  a  more  equitable  method  of  raising  revenue  be  substituted. 

I  regard  this  contemplated  zone  change  as  a  serious  detriment  to  the  distribution 
of  what  must  be  useful  and  constructive  material.  It' does  seem  to  me  that  some  more 
equitable  plan  for  raising  money  could  be  devised  than  this  taxing  of  periodicals. 

A.  Barton  Hepburn,  chairman  of  the  board  of  directors  of  the  Chase  National  Bank: 
If  this  measure  (the  postal  zone  law)  applies  to  all  magazines,  as  I  understand  it  does, 
I  should  think  that  it  is  very  unwise. 

Hon.  Tom  C.  Rye,  governor  of  Tennessee:  Tennessee  papers  have  shown  wonderful 
patriotism  and  have  been  of  great  help  to  us  in  our  work.  I  hope  the  matter  can  be 
arranged  so  that  the  papers  can  pay  their  proportionate  part  of  the  additional  revenue 
needed  without  forcing  any  out  of  business  or  crippling  them  in  their  work. 

Prof.  Walter  B.  Pitkin,  of  the  Columbia  University  Faculty:  The  new  postal  zone 
law  is  based  on  "peanut-shell  politics."  It  should  never  have  been  enacted;  it 
most  certainly  should  never  go  into  effect. 

There  is  practically  nothing  to  be  said  in  favor  of  the  new  system.  It  will  aid  a 
few  of  the  sectional  periodicals  and  it  will  bring  a  little  additional  money  into  the 
Post  Office  Department,  but  to  offset  this  it  will  destroy  many  magazines  of  national 
importance;  it  will  curtail  the  nation-wide  circulation  of  our  leading  newspapers;  it 
will  result  in  increase  of  cost  both  to  the  reader  and  to  the  publisher,  and  to  dissatis- 
faction on  the  part  of  the  advertisers.  It  is  on  the  whole  obnoxious  and  unsatisfac- 
tory and  should  be  repealed. 

The  new  law  destroys  national  unity  and  creates  sectional  spirit.  It  limits  na- 
tional intelligence.  The  people  in  the  West  are  entitled  to  know  what  the  East  is 
doing,  and  vice  versa.  Without  this  knowledge,  which  only  can  be  disseminated 
by  magazines  and  newspapers  our  spirit  of  nationalism  will  be  destroyed. 

Hon.  James  Withycomhe,  governor  of  Oregon:  To  my  mind  it  would  be  unwise  at 
this  time  to  discourage  unduly  the  circulation  of  good  literature.  First  of  all,  this 
Nation  is  passing  through  an  epoch-making  period,  and  the  many  issues  which  are 
now  before  the  people  are  of  such  importance  that  a  full  understanding  of  all  ques- 
tions and  events  is  highly  desirable. 

Hon.  Frederick  D.  Gardiner,  governor  of  Missouri:  Any  restriction  upon  the  dis- 
semination of  information  is  indefensible  even  in  ordinary  times.  At  this  time  it 
would  be  a  most  serious  mistake. 

It  is  extremely  important  that  the  people  be  kept  advised  as  to  the  war  program 
and  the  progress  of  events.  The  Lest  possible  vehicles  for  the  spreading  of  such 
information  are  the  newspapers  and  magazines. 

Public  speakers  can  not  reach  all  the  people.  In  many  inland  districts  speakers 
and  the  peo^ile  can  not  be  brought  together.  Therefore,  I  am  firmly  convinced  that 
the  zone  law  effective  July  1  should  be  repealed. 

A  tax  on  intelligence  should  be  the  last  to  be  imposed.  The  Government  should 
not  take  any  action  that  will  increase  cost  of  periodicals.  The  small  profits  to  pub- 
lishers will  not  stand  the  increase.  Hence  it  will  fall  on  the  people,  with  the  result 
that  many  most  needing  information  will  be  unable  to  procure  it. 


40  SOME    POSTAL    ECONOMICS 

Hon.  Arthur  Capper,  governor  of  Kansas:  If  Congress  can  be  made  to  see  that  the 
industry  can  not  pay  this  tax  and  that  its  imposition  will  result  only  in  a  demoraliza- 
tion of  business,  it  seems  to  me  that  even  the  most  rabid  opponents  of  a  free  press  will 
hesitate  to  place  this  unbearable  injustice  upon  the  people.  It  is  especially  im- 
portant at  this  time,  when  the  Government  must  have  the  loyal  support  and  hearty 
sympathy  of  every  citizen,  that  the  American  press  receive  encouragement  rather 
than  discouragement. 

The  winning  of  the  war  depends  upon  the  people  at  home,  and  though  the  Govern- 
ment printing  plants  work  overtime,  we  still  must  depend  upon  the  press  to  inform, 
educate,  and  unify  the  people.  The  imposition  of  the  zone  system  at  this  time  would 
be  a  strategical  blunder  that  would  amount  to  a  national  calamity. 

Hon.  Richard  I.  Manning,  governor  of  South  Carolina:  I  think  that  any  law  which 
bars  the  publication  of  magazines  and  newspapers,  and  especially  hampers  their  dis- 
tribution to  those  who  are  less  able  to  pay  for  it,  is  a  step  backward  in  the  progress  of 
education  and  enlightenment. 

I  also  think  that  such  a  regulation  should  not  be  put  into  effect  during  the  progress 
of  the  war  unless  its  necessity  to  the  Government  prosecution  of  the  war  is  absolutely 
required. 

Hon.  Walter  E.  Edge,  governor  of  New  Jersey:  It  is  unquestionably  unfortunate  if 
necessity  requires  any  Federal  action  which  would  increase  the  cost  to  the  public,  in 
order  to  be  kept  informed  properly  of  the  unusual  happenings  of  the  day  and  their 
review  from  all  angles  through  the  medium  of  the  public  press. 

In  my  judgment  the  press  of  the  country  has  furnished  the  greatest  selling  agency 
for  Liberty  bonds  and  for  organizing  and  popularizing  every  activity  to  which  the 
public's  support  was  imperative.  It  would  seem  to  me,  speaking  generally,  that  every 
effort  should  be  made  by  the  Government  to  increase  the  opportunity  for  a  still 
greater  distribution. 

John  Mitchell,  chairman  of  the  State  Industrial  and  Federal  Food  Commissions: 
I  am  opposed  fo  any  and  all  legislation  which  will  circumscribe  the  circulation  of 
American  magazines  and  newspapers.  Without  these  mediums  the  enlightenment 
and  education  of  the  people  throughout  the  country  would  be  impossible.  This 
zone  law  certainly  should  be  held  in  abeyance  at  least  during  the  war,  for  it  is  impos- 
sible to  calculate  the  good  which  the  periodicals  are  doing  the  country  and  the  harm 
which  would  result  if  their  circulation  were  cut  off. 

Hon.  Robert  L.  Williams,  governor  of  Oklahoma:  I  believe  the  law  should  be  held 
in  abeyance,  at  least  until  after  the  war. 

The  newspapers  and  other  periodicals  of  current  comment  are  vital  war  agencies 
in  disseminating  news  concerning  the  war.  Liberty  loans,  the  Red  Cross  and  others 
organizations,  and  much  of  the  credit  for  the  success  of  the  draft,  the  three  Liberty 
loans,  the  two  Red  Cross  campaigns,  the  Young  Men's  Christian  Association  cam- 
paign, and  the  Knights  of  Columbus  drive  is  due  to  a  favorable  public  sentiment 
which  these  publications  have  had  no  small  part  in  forming. 

Hon.  James  W.  Gerard,  ex-ambassador  to  Germany:  Now  we  have  got  to  meet  this 
^German  propaganda.  The  war  is  not  going  to  last  forever — and  you  have  seen  what 
German  propaganda  has  done  in  Russia.  These  are  grave  dangers,  and  they  only  go 
to  show  what  can  happen  in  a  country  like  Russia. 

Fortunately,  they  can  not  propaganda  this  country  as  they  can  Russia,  because  we 
have  great  publications  that  go  all  over  the  country  and  have  unified  the  whole 
country  and  the  whole  continent.  That  is  why  I  am  against  the  postal  zone  law 
passed  in  the  last  Congress  putting  an  extra  tax  on  papers  sent  from  the  cities  where 
published. 

_  Hon.  Charles  S.  Whitman,  governor  of  New  York:  Never  was  the  call  more  impera- 
tive, the  necessity  more  obvious  than  now  for  the  business  like  conduct  of  business. 
We  speak  of  the  Government's  business,  we  speak  of  the  Nation's  business.  Why, 
gentlemen,  all  business  that  is  honestly  transacted  in  this  country  to-day  is  essentially 
the  Nation's  business.  General  information  upon  business  matters  must  be  widely 
disseminated,  so  that  the  most  progressive  and  practical  ideas  developed  by  Ameri- 
can ingenuity  may  be  placed  at  the  disposal  of  our  people  in  every  section  of  the 
country,  and  that,  too,  without  delay  or  unnecessary  cost. 

No  publications  of  a  similar  nature  in  any  other  part  of  the  civilized  world,  and  this 
is  known  all  over  the  world,  have  ap[)roximatcd  in  character  and  in  quality  the  trade 
journals  of  the  United  States. 


SOME    POSTAL    ECONOMICS  41 

In  the  present  crisis,  every  individual  and  every  State  as  well  must  forget  local 
ambition,  local  interests  perhaps,  and  even  requirements  of  special  localities  in  re- 
sponse to  the  great  national  call,  the  call  of  our  country  which  mast  be  heard  and 
heeded  everywhere.  It  is  for  this  reason  that  I  have  in  the  past  protested  and  will 
continue  to  protest  against  the  imposition  of  zone  postal  rates,  which  must  inevitably 
with  such  rates  tend  to  confine  their  distribution  to  the  neighborhoods  comparatively 
near  their  publishing  houses,  and  must  of  necessity  restrict  their  efficiency  as  nation- 
wide distributors  of  business  news.  It  isn't  good  national  policy,  whether  it  is  good 
for  j^our  business  or  not. 

I  have  been  and  shall  be  unqualifiedly  opposed  to  the  zoning  system  of  postage 
rates  which  will  tend  to  paralyze  the  w^ide  extension  of  the  nervous  system  of  business 
provided  by  trade  newspapers. 

Charles  E.  Hughes:  I  hope  that  Congress  will  repeal  the  provision  for  the  zone 
system  which  is  decidedly  a  looking-backward  and  walking-backward  measure. 


ZONE   SYSTEM    WRONG    POSTAL   PRINCIPLE 

You  are  abandoning  a  postal  system  which  has  made  this  country 
the  most  enhghtened  and  best  informed  on  earth.  You  are  going 
back  to  old  discarded  and  discredited  postal  principles  when  you 
erect  zone  fences  every  few  hundred  miles  to  obstruct  and  impede 
the  interchange  of  life-giving  information,  call  it  advertising  or  what 
you  will,  between  the  people  of  the  United  States. 

You  recognize  and  no  one  would  dream  of  attacking  the  principle 
of  a  flat  rate  on  letters  or  on  third-class  matter.  The  civilized  nations 
of  the  world  have  recognized  the  necessity  for  uniform  flat  rates  for 
international  intercourse,  if  the  barriers  of  distances  are  to  be  de- 
stroyed and  the  nations  of  the  world  brought  together. 

When  this  destructive  zone  system  of  rates  is  in  full  force  and  oper- 
ation, a  publisher  can  send  his  paper  around  the  world  for  about  the 
same  as  the  rate  to  the  eighth  zone.  It  will  make  no  difference  either 
whether  the  ocean  steamship  carries  the  paper  1,000  miles  or  5,000 
miles,  for  the  rate  is  a  flat  rate  to  any  point  in  any  nation  in  the  uni- 
versal postal  union.  Furthermore,  publishers  in  Canada  ^vill  be 
able  to  ship  their  papers  to  any  point  in  the  United  States  for  less 
than  it  will  cost  to  send  papers  from  San  Francisco  to  Chicago.  More- 
over, under  the  present  second-class  rate  any  private  individual  can 
mail  a  paper  to  any  point  in  the  country  for  a  flat  rate  of  4  cents  a 
pound,  which  will  be  less  than  the  average  zone  rate  beyond  the  fourth 
zone.  I  respectfully  submit  that  there  is  something  wrong  with  a  bill 
which  permits  such  inequalities. 

Every  deep  student  of  postal  matters  has  advocated  flat  rates. 
Let  me  quote  here  a  man  for  whose  opinions  I  have  profound  respect — 
Daniel  C.  Roper,  formerly  First  Assistant  Postmaster  General  and 
now  Commissioner  of  Internal  Revenue.  These  extracts  are  from 
Roper's  History  of  the  United  States  Post  Office: 

The  postal  reforms  successfully  carried  out  in  England  between  18.37  and  1840 
established  the  important  principle  that  postal  efficiency  depends  on  uniformity 
of  rates  and  standardized  conditions. 

It  is  because  of  the  economic  utility  of  the  post  office  that  extensions  of  postal 
service  where  needed  are  justified  altlxough  the  return  in  postage  receipts  may  not 
defray  the  cost  of  the  extension. 

The  importance  of  postal  service  should  be  measured  by  the  benefits  which  it 
confers  and  by  the  wealth  it  creates  rather  than  by  the  postal  charge  or  the  postal 
revenue. 


42  SOME    POSTAL    ECONOMICS 

Taxation  obviously  is  not  the  motive  underlying  the  operation  of  the  postal  service 
by  the  Federal  Government;  it  is  not  permitted  to  be  even  an  incidental  phase  of 
the  post-office  administration.  The  people  and  their  representatives  are  most  jealous 
of  any  restraint  of  the  operation  of  the  post  office.  They  require  it  to  be  untram- 
meled.  and  have  even  been  willing  that  it  should  be  subsidized  out  of  the  Treasury 
to  the  extent  necessary  to  make  its  facilities  more  generally  useful.  The  reason 
for  this  attitude  lies  in  the  economic  utility  of  the  post  office. 

NO   ANALOGY   BETWEEN    PORK   AND    INFORMATION 

It  is  not  fair  to  muddy  the  issue  by  attempting  to  compare  the 
distribution  of  information  and  education  with  material  commodi- 
ties. Pork  and  information  are  as  unlike  as  Vjrick  and  brains.  Free 
intercourse  between  the  people  is  the  necessary  antecedent  of  all  busi- 
ness transactions.  It  is  good  economics  and  good  statesmanship 
to  promote  such  intercourse,  because  it  is  only  through  that  means 
that  a  sale  can  take  place,  that  merchandise  can  be  produced  or  shipped. 
This  is  a  big  country,  gentlemen,  and  national  unity  of  thought,  purpose 
and  action  is  an  absolute  necessity. 

We  are  not  united  simply  by  the  Constitution,  or  even  by  a  com- 
mon language.  Even  the  physical  union  which  is  accomplished  by 
the  railroads  would  be  of  no  avail  without  the  unity  which  is  the 
product  of  common  ideals,  uniformity  of  education,  and  singleness 
of  purpose.  People  do  not  think  together,  do  business  together,  act 
together,  and  fight  together  unless  bound  together  by  a  common  bond 
of  sympathy,  which  can  only  result  from  a  free  interchange  of  ideas 
on  an  equitable  basis  to  all  sections.  Keep  the  country  together, 
gentlemen.  Don't  impose  at  this  time  any  conditions  that  tend  toward 
disintegration?  Look  at  Russia.  Did  she  lack  men?  Think  of  her 
hordes,  millions  on  millions.  Did  she  lack  material?  Think  of  the 
vast  resources  of  the  Russian  Empire.  Yet  to-day  she  lies  prostrate 
a  mass  of  wreckage,  because  of  the  lack  of  unity  on  the  part  of  the  Rus- 
sian people. 

The  lack  of  unity  was  due  to  the  lack  of  unifying  influences.  They 
lacked  national  periodicals,  they  lacked  newspapers,  they  lacked  the 
reading  habit,  they  lacked  common  ideals  and  they  lacked  common 
purposes  which  would  have  been  inculcated  thereby.  There  was  nothing 
to  hold  them  together  except  an  autocratic  government,  and  when  that 
failed  the  country  disintegrated. 

EDUCATIONAL   NEED    OF   PERIODICALS 

I  wonder  if  you  realize  that  only  7  out  of  every  100  boys  and  girls 
go  through  our  high  schools  and  that  only  a  small  percentage  of  these 
are  able  to  enter  a  university?  The  schooling  possibly  of  some  here 
was  confined  to  a  high  school,  but  our  education  has  been  carried  on 
ever  since,  chiefly  through  the  reading  of  educational  or  cultural  periodi- 
cals. 

Professional  men  find  the  publications  of  their  professions  practi- 
cally a  post-graduate  course.  No  doctor,  electrician,  chemist,  engi- 
neer, dentist,  or  other  professional  man  could  possibly  keep  pace  with 
current  scientific  progress  without  his  own  ))r()fessional  paper. 

If  it  is  worth  while  for  us  to  make  any  sacrifice  to  maintain  our 
institutions  of  learning,  none  of  which  are  self-supporting  and  which 


SOME    POSTAL    ECONOMICS  43 

have  the  teaching  of  our  children  for  not  more  than  eight  years  in  a 
great  majority  of  instances,  how  much  more  important  is  it  to  culti- 
vate by  every  reasonable  means  sources  of  education  and  enlighten- 
ment upon  which  our  children  must  depend  after  they  leave  the  com- 
mon school,  over  a  period  of  many  time  eight  years. 

We  favor  the  widest  possible  extension  of  postal  service  and  its 
reduction  in  cost  wherever  possible,  rather  than  increased  cost  or  con- 
tracted service.  We  instituted  the  rural  free  delivery,  not  to  produce 
revenue,  because  it  was  merely  an  extension  of  service,  involving  many 
millions  of  additional  cost,  but  to  still  further  unite  or  bring  together 
the  people  of  every  district,  however  remote  from  cities  or  towns. 
That,  gentlemen,  is  another  striking  example  of  the  benefit  of  flat 
rates.  We  didn't  say  to  the  man  who  lives  20  miles  from  the  post 
office  that  he  would  have  to  pay  more  for  the  delivery  of  his  mail  than 
the  man  living  1  block  from  the  post  office,  but  we  said,  in  effect,  "this 
is  one  country,  one  people,  under  one  Government,  and  we  propose 
that  every  man  in  this  country  shall  have  access  to  information  of  all 
kinds  on  exactly  the  same  basis  as  every  other  man. " 

You  instituted  the  rural  free  delivery,  not  to  benefit  the  publishers, 
not  even  as  was  falsely  claimed  to  benefit  the  mail  order  houses,  but 
you  passed  that  law  as  a  measure  of  justice  and  equality  to  our  rural 
citizens.  It  would  be  a  rash  statesman  indeed  who  would  now  advocate 
the  withdrawal  of  this  service. 

The  one  cent  flat  rate  on  newspapers  and  periodicals  was  likewise  a 
measure  of  justice  and  equality  to  citizens,  both  rural  and  urban,  in 
all  sections  of  this  widely  flung  land  of  ours. 

NATIONAL   PAPERS   NOT   AFFECTED    BY   LOCATION 

There  has  been  some  comment  upon  the  fact  that  a  large  number  of 
periodicals  are  published  in  New  York  State,  and  that,  therefore,  the 
charge  of  sectionalism  would  apply  against  periodicals  being  published 
in  that  section  of  the  country. 

In  the  first  place,  it  is  a  mistake  to  say  that  the  majority  of  periodi- 
cals are  pubUshed  in  New  York.  New  York  State,  you  must  bear  in 
mind,  contains  12  per  cent  of  the  population  of  the  country,  but  it 
produces  only  25  per  cent  of  all  newspapers  and  periodicals  and  of  all 
general  printing.  The  other  75  per  cent  is  scattered  all  over  the  country. 
Next  after  New  York  comes  Illinois,  then  Pennsylvania,  Massachusetts. 
Ohio,  Missouri,  and  California,  in  the  order  named. 

A  national  periodical  circulates  all  over  the  country,  but  quite  obvi- 
ously must  be  published  in  some  one  place.  The  various  centers  of 
publication  throughout  the  country  have  grown  up  under  a  flat  postal 
rate,  which  gave  no  advantage  to  one  section  over  another.  A  paper 
published  in  Wichita,  Kans.,  up  to  this  time  has  had  the  same  postal 
rate  to  all  sections  of  the  country  as  a  paper  published  in  San  Fran- 
cisco, Cincinnati,  St.  Paul,  or  New  York. 

As  a  result,  the  publication  business  has  gravitated  naturally  to 
the  cities  bes^  adapted  to  the  particular  requirements  in  each  case. 
Such  publications  as  may  be  issued  in  New  York  or  Chicago,  which 
are  the  two  main  centers,  are  published  there  because  those  cities 
afford  superior  advantages  from  every  standpoint. 


44  SOME    POSTAL    ECONOMICS 

This  condition  is  no  more  forced  or  artificial  than  the  location  of 
the  flour  mills  at  Minneapolis,  the  steel  mills  at  Pittsburgh,  the  auto- 
mobile factories  at  Detroit,  the  meat-packing  business  in  Chicago,  or 
the  rubber  industry  in  Akron. 

The  new  zone  system  of  postal  charges  will,  however,  introduce 
an  influence  which  will  make  it  exceedingly  difficult  for  national  pub- 
lications to  continue  their  location  at  the  most  suitable  points. 

The  editorial  policy  of  national  papers  is  not  in  the  least  affected 
by  the  location  of  the  publishing  office.  A  paper  can  not  get  and 
hold  a  national  circulation  unless  it  reflects  national  thought  and 
serves  national  interests.  Its  circulation  depends  entirely  upon  the 
nature  of  its  appeal  and  not  upon  its  location.  It  is  just  as  true  that 
a  sectional  publication  must  confine  its  activities  to  the  interests  of 
the  section  in  which  it  circulates. 

This  is  no  criticism  of  sectional  papers.  These  are  no  less  neces- 
sary than  national  periodicals.  But  to  say  that  sectional  papers 
can  serve  the  interests  of  the  country  as  a  whole  is  as  much  opposed 
to  reason  as  to  say  that  we  could  do  away  with  the  great  trunk  lines 
of  railroad  and  get  along  better  with  nothing  but  city  trolley  lines 
and  innumerable  little  pocket-edition  railroads. 

So  I  say,  gentlemen,  that  it  is  beside  the  question  to  assail  peri- 
odicals because  many  of  them  happen  to  be  published  in  New  York 
State. 

The  prominence  of  New  York  in  many  of  our  industries  is  some- 
thing which  should  inspire  pride  on  the  part  of  the  country  as  a  whole. 
I  am  no  less  a  good  citizen  of  New  York,  because  I  am  proud  of  the 
achievements  and  progress  of  Ohio,  of  Massachusetts,  of  California, 
of  Pennsylvania,  of  Illinois,  or  of  any  of  the  other  great  States  of  this 
United  States,  and  I  might  add  that,  if  we  are  to  prevent  the  growth 
of  narrow  and  stifling  prejudices  and  jealousies,  our  first  duty  should 
be  to  encourage  by  every  means  within  our  power  the  developments 
of  great  interlocking  and  interlacing  highways  of  national  thought. 

A   FEW   FIGURES 

Six  years  ago,  I  think  it  was,  the  Postmaster  General  figured  that 
free,  franked,  and  penalty  mail  was  costmg  $20,000,000  a  year  to 
handle.  What  it  is  now  is  largely  a  matter  of  conjecture.  Early 
in  1917  I  read  some  unofficial  estimates  which  gave  the  current  cost 
as  $25,000,000.  I  believe  it  is  even  higher  now,  on  account  of  the 
vast  amount  of  matter  being  sent  out  because  of  war  requirements 
by  the  different  departments. 

This  is  an  item  which  can  not  be  ignored  in  any  cost  investigation 
of  postal  finances. 

Now,  if  this  $25,000,000  had  been  properly  charged  to  the  various 
Government  departments,  the  post  office  would  have  shown  a  profit 
in  1917  of  $37,000,000  instead  of  $12,000,000. 

Let's  carry  this  a  little  further — 

The  rural  free  delivery,  a  splendid  and  necessary  Government  ser- 
vice, now  costs  approximately  $50,000,000.  It  is  not  used  at  all  by 
trade  and  technical  papers;  neither  is  it  really  necessary  for  weekly 


SOME    POSTAL    ECONOMICS  45 

and  monthly  periodicals.  Every  family  gets  to  the  post  office  at 
least  once  a  week.  If  we  had  not  put  in  the  rural  free  delivery  the 
Post  Office  would  not  be  spending  the  huge  sum  required  for  its  main- 
tenance, and  the  $50,000,000  thus  saved  would  be  added  to  the  surplus 
of  S37,000,000  just  alluded  to,  making  a  total  of  $87,000,000  surplus 
over  expenditures. 

In.  1918  the  Postmaster  General  reported  a  profit  of  over  $19,000,000 
despite  the  enormous  and  unprecedented  increase  in  government  mail 
on  account  of  the  war.  For  the  sake  of  uniformity  let  us  keep  the 
estimated  cost  of  this  free,  franked  and  penalty  mail  at  $25,000,000 
which  as  I  have  said  should  not  be  charged  against  the  P.  O.  Department 
as  an  expense  but  rather  against  the  other  departments  using  the  postal 
facilities.  Totaling  the  1918  surplus,  the  cost  of  handling  government 
mail,  and  the  cost  of  rural  free  delivery  over  and  above  its  receipts,  we 
get  an  aggregate  sum  of  $94,000,000.  To  this  ought  be  added  the 
cost  of  handling  county  newspapers  which  are  carried  and  delivered  free 
in  the  county  of  publication.  This  amounts  to  $4,000,000.  Our 
grand  total  now  amounts  to  $98,000,000. 

Where  is  the  alleged  loss  on  Second  Class  Matter? 

PATRIOTIC   SERVICE    OF   BUSINESS    PRESS 

I  have  told  in  a  way  which  I  wish  might  have  been  stronger  and 
more  impressive  something  of  the  invaluable  service  that  the  trade 
and  technical  papers  are  rendering  industry  and  the  people.  Now, 
let  me  call  your  attention  to  the  vital  relationship  of  these  papers  to 
the  United  States  Government  at  this  tragic  and  critical  hour  in  our 
history.  Congress  has  appropriated  thousands  of  millions  of  dollars; 
it  has  not  hesitated  to  delegate  unlimited  powers  to  the  executive 
and  administrative  branches  of  the  Government;  no  just  appeal  for 
legislative  action  has  gone  unheeded;  it  has  realized  that  quick,  smash- 
ing blows  must  be  struck;  that  every  hour's  delay  would  mean  the 
needless  sacrifice  of  our  splendid  young  soldiers.    • 

I  would  not  withhold  from  Congress  one  iota  of  the  credit  that  is  due 
them  for  the  eager  support  they  have  given  to  our  boys  in  khaki  and  to 
our  entire  war  program.  In  the  light  of  all  that  they  have  done,  I 
can  not  believe  that  they  will  knowingly  take  away  from  the  depart- 
ments of  Government  one  of  the  chief  instrumentalities  which  they  are 
employing  in  the  prosecution  of  the  war. 

The  trade  and  technical  press,  and  the  other  papers,  have  become 
practically  an  arm  of  the  Government,  and  I  hope  that  Congress  will 
let  our  Government  continue  to  use  the  full  power  and  strength  of  this 
arm. 

The  huge  sums  Congress  has  appropriated  are  flowing  back  into 
almost  all  necessary  industries  with  the  exception  of  the  publishing 
business.  We  are  getting  none  of  it;  we  have  no  "war  babies."  On 
the  contrar}',  we  are  struggling  against  high  prices  and  shortages  of 
material  without  any  compensating  advantages.  Besides  all  this, 
we  are  the  only  industry  in  this  country  which  is  giving  its  product  to 
the  Government  without  limit,  condition  or  cost. 

Back  in  April,  1917,  I  went  to  Washington  in  company  with  a  com- 
mittee, and  laid  before  the  various  departments  of  the  Government 
this  offer: 


46  SOME    POSTAL    ECONOMICS 

"In  common  with  others,  the  business  papers  of  the  country — 
technical,  trade,  and  class  publications — place  service  above  expe- 
diency and  patriotism  above  profit. 

"There  are  bonds  to  be  sold.  Industries  are  to  be  mobilized.  The 
Government  must  speak  to  the  men  who  plan  and  do  things.  The 
business  of  the  country  must  be  enlisted.  Knowing  that  we  can 
perform  this  service  at  this  critical  hour,  and  answering  the  Presi- 
dent's call,  we,  the  publishers  of  the  following  papers,  hereby  tender 
to  the  Government  our  advertising  pages  without  expense,  and  our 
editorial  columns." 

At  the  time  that  this  offer  was  made,  the  question  of  whether  the 
Government  should  pay  for  advertising  was  very  seriously  discussed, 
and  the  organization  that  I  represent  took  this  action  by  telegram. 
Since  that  time  we  have  had  100  or  200  names — I  haven't  the  exact 
number,  but  it  was  between  400  and  500  publications  that  report 
to  my  office,  whose  columns  absolutely  belong  to  the  Government. 
As  an  instance,  the  trade  and  technical  papers  with  which  I  am  in  contact 
— and  I  represent  only  the  trade  and  technical  papers — -donated  for  the 
four  liberty  loans  alone  14,000  pages  of  advertising  and  specially  written 
editorial  matter. 

APPEAL   FROM   WAR   DEPARTMENT 

On  November  23,  last  fall,  we  had  this  letter  from  Hon.  Newton  D. 
Baker,  Secretary  of  War.     It  was  addressed  to  my  office: 

November  23,  1917. 

Sirs:  The  great  need  for  skilled  mechanics  in  the  Aviation  Section  of  the  Signal 
Corps  is  well  known  to  your  association. 

Appreciating  the  fact  that  your  members,  publishers  of  technical  and  trade  papers 
throughout  the  United  States,  are  in  close  touch  with  the  employers  of  such  skilled 
labor  as  we  need,  and  fully  appreciating  the  influence  and  efficiency  of  the  business 
papers  in  their  respective  industrial  fields,  you  are  asked  by  the  War  Department  of 
the  United  States  to  assist,  through  publicity  and  organized  personal  effort,  in  secur- 
ing for  the  Aviation  Section  the  large  number  of  mechanics  and  skilled  workmen 
necessary  back  of  the  lines  to  keep  the  air  service  in  effective  action. 

The  Government  knows  and  appreciates  your  excellent  work  and  previous  patriotic 
efforts,  and  notwithstanding  your  previous  work  in  the  present  crisis,  feels  that  you 
will  welcome  this  further  urgent  call  for  efficient  patriotic  service. 

Very  truly,  yours, 

Newton  D.  Baker, 

Secretary  of  War. 
Associated  Business  Papers  (Inc.), 

220  West  Forty-second  Street,  New  York  City,  N.   Y. 

That  was  written  on  November  23.  You  may  realize  the  rapidity 
with  which  we  moved  in  that  matter  when  I  submit  a  letter  signed 
by  Maj.  W.  L.  Moose,  of  the  Signal  Corps,  who  is  in  charge  of  that 
section  of  the  work.  I  may  state  in  passing  that  one  of  the  officers 
told  our  committee  that  if  they  got  12,000  men  before  the  15th  of 
December  they  would  be  breaking  all  records.  This  letter  from  Maj. 
Moose,  states  that,  according  to  the  Adjutant  General's  Office,  there 
were  approximately  42,800  'men  secured  in  the  drive  between  December 
1  and  December  15  for  the  Signal  Corps.  The  total  number  of  en- 
listments for  the  Signal  Corps  for  the  month  of  November  was  9,870. 
He  states  that  "this  office  is  very  grateful  for  this  most  successful 
campaign  which  was  conducted  under  you  directly.  For  without  the 
aviation  section  of  the  Signal  Corps  would  be  nmch  in  need  of  men  at  the 
present  time." 


SOME    POSTAL    ECONOMICS 


47 


(The  letter  is  as  follows:) 


February  7,  1918. 


Sirs:  With  reference  to  our  conversation  in  regard  to  the  number  of  enUstments 
that  were  procured  between  Decemljer  1,  1917,  and  December  15,  1917,  in  your  cam- 
paign for  men  for  the  Aviation  Section  of  the  Signal  Corps,  I  have  been  unable  to  get 
accurate  data  as  to  the  number  of  enlistments.  According  to  the  record  in  the 
Recruiting  Division  of  the  Adjutant  General's  Office,  there  were  approximately  42,800 
men  secured  in  the  drive  between  December  1,  1917,  and  December  15,  1917,  for 
the  Signal  Corps.  The  total  number  of  enlistments  for  the  Signal  Corps  for  the 
month  of  November  was  9,870. 

From  the  above  you  can  see  that  the  enlistments  after  your  drive  was  started  were 
more  than  four  times  what  they  had  been  during  the  previous  month.  I  am  of  the 
opinion  that  most  of  this  increase  was  due  to  you  and  your  committee's  advertising 
campaign. 

This  office  is  very  grateful  for  this  most  successful  campaign  which  was  conducted 
under  your  direction.  For  without  it  the  Aviation  Section  of  the  Signal  Corps  would 
be  very  much  in  need  of  men  at  the  present  time.  The  stopment  of  enlistments  in 
the  draft  age  and  the  delay  in  starting  the  special  draft  of  the  Provost  Marshal 
General's  Office  has  made  it  practically  impossible  for  the  Aviation  Section  to  secure 
men  before  February  15,  1918.  For  this  reason  you  can  see  that  your  campaign  was 
a  godsend  to  the  Aviation  Section. 

Again  thanking  you  and  your  committee  for  your  untiring  efforts  in  this  campaign, 
I  am, 

Very  sincerely,  yours, 

W.  L.  Moose, 
Major,  Signal  Corps. 
Associated  Business  Papers  (Inc.), 

Committee  on  Recruiting  for  Aviation  Section,  Signal  Corps, 

220  West  Forty-second  Street,  New  York,  N.   Y. 

I  have  a  letter  from  Maj.  Steever,  of  the  Signal  Corps,  in  which  he 
refers  to  the  same  matter,  and  credits  the  committee  with  the  respon- 
sibility for  the  success  in  the  campaign. 

(The  letter  is  as  follows :) 

War  Department, 
Office  of  the  Chief  Signal  Officer, 
Washington,  January  17,  1918. 

Sirs:  You  will,  no  doubt,  be  gratified  to  know  that  the  recent  recruiting  campaign 
for  skilled  workers  was  successful  beyond  our  needs  and  expectations.  The  number 
of  men  obtained  l)y  far  exceeded  the  requirements  of  the  moment. 

The  earnest  and  active  cooperation  of  the  business  papers  in  this  recruiting  drive 
was  a  great  factor  in  its  success.  The  publicity,  reaching  directly  into  the  business 
houses  of  the  trades  required,  exerted  a  powerful  influence,  as  was  shown  by  the  num- 
ber of  direct  inquiries  coming  into  this  office  traceable  to  the  business  papers. 

In  addition  to  the  combined  efforts  of  the  business  papers  for  publicity,  this  office 
wishes  to  express  its  appreciation  of  the  individual  efforts  of  the  members  actively 
engaged,  through  whose  activities  it  was  possible  in  record  time  to  print  and  dis- 
tribute a  large  quantity  of  literature,  posters,  etc. 

Very  truly,  yours, 

E.  E.  Steener, 
Major,  Signal  Corps. 
Associated  Business  Papers  (Inc.), 

Committee  on  Recruiting  for  Aviation  Section,  Signal  Corps, 
220  West  Forty-Second  Street,  New  York,  N.   Y. 


As  a  director  in  the  U.  S.  Division  of  Advertising  it  has  been  a  refresh- 
ing, wonderful  experience  to  see  the  almost  unanimous  and  eager 
expression  of  patriotism  on  the  part  of  these  people,  who  would  be 
insulted  almost  if  you  offered  them  pay  for  anything.     I  agree  with 


48  SOME    POSTAL    ECONOMICS 

Dr.  Frank  Crane  in  his  statement  that  the  American  people,  generally 
speaking,  are  not  going  over  the  top  for  pay — at  least,  that  has  been  our 
experience. 

PAPERS   GET   SHIPYARD    WORKERS 

A  short  time  ago  the  United  States  Shipping  Board  wanted  350,000 
shipyard  volunteers.  The  first  thing  that  Mr.  Hurley  did  was  to  take 
the  train  to  New  York,  and  we  elaborated  the  entire  campaign.  Mr. 
Hurley  and  the  others  connected  with  it,  including  the  Secretary  of 
Labor,  credit  that  campaign  with  getting  not  350,000,  but  400,000 
shipyard  workers. 

This  is  the  letter  that  Mr.  Hurley  wrote  acknowledging  our  services: 

Mr.  Jesse  H.  Neal,  May  14,  1918. 

Executive  Secretary  the  Associated  Business  Papers, 

220  West  Forty-second  Street,  New  York  City. 

My  Dear  Mr.  Neal:  I  want  to  tell  you  and  those  connected  with  the  division  of 
advertising  that  the  services  rendered  to  the  United  States  Shipping  Board  and  the 
Emergency  Fleet  Corporation  by  the  business  papers  in  our  recent  campaign  for  ship- 
yard volunteers  deserves  our  highest  commendation. 

The  editorials  which  these  papers  published  and  the  advertisements  bearing 
coupons  and  post  cards  to  be  filled  in  by  those  desiring  to  enroll  in  the  shipyard 
volunteers  materially  helped  us  in  secvu-ing  our  full  quota  of  volunteers. 

I  recognize  the  great  force  of  the  technical  and  trade  press  of  the  country  and  par- 
ticularly in  these  critical  times,  both  with  relation  to  business  as  well  as  to  the  war. 

Please  accept  this  as  a  testimonial  of  my  appreciation  of  your  very  valuable  services 
and  the  assistance  given  us  by  the  Associated  Business  Papers. 

Sincerely  yours, 

Edward  N.  Hurley,  Chairman. 

Shortly  after  that  The  Division  of  Advertising  entertained  the 
President's  Cabinet  and  the  heads  of  the  Government  at  a  dinner  at 
the  Willard  Hotel,  and  in  the  course  of  that  dinner  the  Secretary  of 
Labor  stated: 

Gentlemen,  we  of  the  Department  of  Labor  have  already  had  considerable  experi- 
ence with  your  work.  In  connection  with  the  Shipping  Board  and  the  Fleet  Corpora- 
tion, we  undertook  the  registration  of  250,000  workingmen.  We  secured  the  co- 
operation of  your  advertising  agencies,  and  as  a  result,  in  the  time  that  we  had 
specified,  we  registered  more  than  300,000  workers  who  are  made  available  for  ship- 
building operations.  We  have  other  work  developing  which  I  believe  you  can  help 
us  to  bring  to  a  successful  conclusion. 

Then  Mr.  Julius  HoU,  of  the  shipyard  organization,  said: 

Last  January,  when  the  Shipping  Board  started  to  enroll  2.50,000  volunteers  for 
work  in  the  shipyards,  we  welcomed  the  assistance  extended  to  us  by  the  division  of 
advertising.  Your  cooperation,  your  skill  in  preparing  editorials  and  advertisements, 
enabled  us  to  reach  practically  every  trade  and  industry  throughout  the  country 
from  which  we  desired  shipyard  volunteers.  In  a  little  over  two  months  we  enrolled 
over  275,000  men. 

Your  camjiaign,  which  consisted  of  placing  editorials  and  advertisements  in  36  of 
the  foremost  magazines  and  42  trade  and  technical  journals,  having  a  combined  cir- 
culation of  8,000,000,  helped  to  make  our  enrollment  a  great  success.  We  enrolled 
thousands  of  men  as  a  direct  result  of  the  coupons  received  in  response  to  these  excel- 
lent advertisements  and  editorials. 

You  know  what  that  service  was  worth  to  the  Government?  I 
question  whether  you  could  put  a  money  valuation  upon  it. 


SOME    POSTAL    ECONOMICS  49 

GOVERNMENT   ACKNOWLEDGES   SERVICE   OF    PERIODICALS 

June  24,   1918. 

My  Dear  Mr.  Neal:  *  *  *  Your  aid  to  us,  I  am  already  well  aware,  has  been 
of  the  most  definite,  wise,  and  unselfish  nature,  and  we  consider  ourselves  greatly  in 
your  debt  for  the  generous  manner  in  which  you  have  contril:)uted  the  columns  of 
your  papers,  which  may  almost  be  said  to  be  the  official  organs  of  the  industries  and 
trades  which  they  represent.     *     *     * 

Very  truly,  yours, 

C.  B.  Clarkson, 
Secretary  of  the  Council  of  National  Defense  and  of  the  Advisory 

Commission. 

Jesse  H.  Neal,  Esq., 

Executive  Secretary,  the  Associated  Business  Papers  (Inc.), 
220  West  Forty-second  Street,  New  York 

Headquarter.s  Twenty-third  Engineers, 

Camp  Meade,  Md.,  January  4,  1918. 
Mr.  C.  N.  LuRiE, 

Editorial  Assistant,  Engineering  News-Record, 

Tenth  Avenue  at  Thirty-sixth  Street,  New  York,  N.   Y. 

My  Dear  Sir:  Referring  to  past  correspondence,  I  take  this  occasion  to  thank  you 
heartily  for  the  effort  which  you  made  to  assist  the  recruiting  for  this  regiment.  The 
result  of  your  effort  has  been  very  gratifying  indeed. 

The  regiment  now  contains  about  4,500  men,  of  a  finer  type,  I  believe,  than  will  be 
found  in  any  other  regiment  of  the  Army.  To  obtain  this  large  number  of  recruits  by 
voluntary  enlistment  within  about  two  months  and  a  half  is,  I  believe,  a  remarkable 
achievement,  especially  when  the  character  of  the  personnel  is  considered. 

Again  thanking  you  for  your  efforts  in  behalf  of  the  regiment,  I  am. 

Very  sincerely, 

E.  N.  Johnston, 
Colonel  of  Engineers,  National  Army. 

An  extract  from  a  letter  from  C.  H.  Sessenden,  captain  of  ordnance: 

Could  you  furnish  us  with  about  500  reprints  of  the  series  of  articles  on  the  manu" 
facture  of  the  panoramic  sight?  We  would  like  to  have  these  copies  as  soon  as 
possible,  as  we  desire  to  furnish  them  to  enlisted  men  who  are  being  sent  here  to 
receive  instructions  in  the  repair  of  fire-control  instruments. 

Col.  Carter,  of  the  Ordnance  Department; 

May  I  thank  you  for  the  poster  left  here  entitled,  "Is  this  my  boy?"  The  caption 
on  this  is  so  very  good  that  we  wish  to  use  it  on  a  poster,  100,000  copies  of  which  will 
be  distributed  to  plants  engaged  in  the  manufacture  of  ordnance  material  for  Persh- 
ing's forces  overseas. 

Gen.  Crozier,  of  the  Ordnance  Department: 

Accept  our  thanks  on  your  wonderful  accomplishment  in  securing  100  skilled  drafts- 
men and  designers.  Your  efforts  in  this  matter  constitute  a  constantly  valuable 
aid  to  the  Government. 

One  of  our  editors  came  to  Washington  and  found  that  they  had 
working  here,  if  I  remember  correctly,  about  a  half  a  dozen  skilled 
machine  designers.  They  had  scoured  the  country  for  men.  The 
wages  were  less  than  were  paid  in  other  divisions  of  the  industry,  and 
they  were  not  able  to  get  them.  This  man  went  back  and  in  three 
weeks'  time,  through  personal  efforts,  brought  to  Washington  over  100 
of  the  best  draftsmen  and  designers  in  the  country,  which  ho  was  able 
to  do  because  of  the  connection  with  the  trade  of  the  paper  which  he 
was  on. 


50  SOME    POSTAL    ECONOMICS 

A  letter  from  Col.  S.  E.  Blunt,  Ordnance  Department: 

I  would  remark  that  your  magazine  has  for  many  years  been  consulted  by  the 
ordnance  arsenals  and  by  a  great  majority  of  its  employees,  containing  as  it  does  not 
only  reading  matter  but  also  many  advertisements  of  kinds  and  methods  of  manu- 
facture. It  is  of  great  value  to  the  employees  and  also  to  officers  directing  the  work 
at  manufacturing  establishments. 


April  9,  1918. 

Mr.  Floyd  W.  Parsons, 

Editor  Coal  Age, 

Tenth  Avenue  and  Thirty-sixth  Street,  New  York  City. 

Dear  Mr.  Parsons:  I  have  read  with  great  interest  your  recent  articles,  and 
wish  to  express  my  appreciation  of  these  contributions  to  a  too  little  known  subject. 
It  is  unimportant  that  the  Fuel  Administration  should  be  justified,  Init  it  is  highly 
important  that  the  public  should  understand  the  problems  with  which  the  Govern- 
ment is  confronted  at  the  present  time,  and  none  is  more  fundamental  and  important 
than  the  one  with  which  the  Fuel  Administration  is  called  upon  to  deal.  Pray 
accept  this  word  of  appreciation  from  the  Fuel  Administration  as  a  whole.  You  are 
telling  the  story  accurately  and  effectively. 

I  have  expressed  to  you,  on  other  occasions,  my  appreciation  of  the  articles  you  have 
published  concerning"  the  work  of  the  Fuel  Administration.  You  have  the  great 
advantage  of  speaking  to  the  industry  directly  and  with  more  insight  than  most  other 
writers.  Possibly  your  entire  freedom  from  connection  here  lends  more  force  to  what 
you  write  than  as  if  you  were  formally  associated  with  the  Fuel  Administration,  but 
I  venture  to  ask  whether  you  would  find  it  possil)le  without  formal  association  here  to 
devote  a  definite  amount  of  time  each  week  to  publicity  work,  giving  special  attention 
to  magazine  articles,  lioth  in  the  technical  and  nontechnical  publications.  Awaiting 
your  reply,  I  remain, 

Very  truly,  yours, 

H.  A.  Garfield, 
United  States  Fuel  Administrator. 

THANKS   FROM    PRESIDENT   WILSON 

Directors  of  the  Division  of  Advertising, 

Committee  on  Public  Information,  Washington,  D.  C. 

Gentlemen:  Mr.  Creel  has  kept  me  informed  of  the  work  done  by  you  and  your 
associates,  and  I  beg  to  convey  my  very  deep  appreciation  of  what  seems  to  me  a 
remarkable  record  of  achievement.  The  effective  campaigns  carried  through  by  you 
in  behalf  of  the  departments  of  Government  have  amply  demonstrated  the  value  of 
coordination,  and  it  is  my  hope  that  the  advertising  profession  will  perfect  still 
further  the  splendid  machinery  of  service. 

Cordially  and  sincerely, 

Woodrow  Wilson. 


June  7,  1918. 

Mr.  William  H.  Johns, 

Chairman  Division  of  Advertising, 

Committee  on  Public  Information,  Metropolitan  Tower, 

New  York,  N.  Y. 

Dear  Mr.  Johns:  Mr.  Frank  C.  Builta  has  told  me  how  splendidly  your  commit- 
tee cooperated  in  helping  us  get  out  advertising  for  our  campaign  culminating  on 
national  war  savings  day  June  28.  He  has  also  handed  me  a  report  showing  that  you 
have  during  the  last  montii  placed  war  savings  advertiseinents  in  1,130  national  i)ub- 
lications  with  a  circulation  of  more  than  55,000,()()()  copies. 

I  want  to  toll  you  how  grateful  our  committee  is  for  the  help  you  have  given  us. 
It  would  have  })een  practically  im])ossible  for  us  to  have  turned  out  the  advertising 
for  our  June  28  campaign  without  the  assistance  of  your  committee,  and,  of  course,  we 
could  have  done  nothing  in  getting  space  in  national  publications. 


SOME    POSTAL    ECONOMICS  51 

It  is  expected  that  the  campaign  for  the  sale  of  war  savings  stamps  will  last  as  long 
as  the  war  does,  and  we  shall  from  time  to  time  take  advantage  of  your  very  kind  offer 
to  prepare  sj)ecial  advertisements  for  us  and  shall  greatly  ai)j)reciate  su(4i  space  as 
you  are  able  to  give  us  in  publications  of  general  circulation. 

Sincerely,  yours, 

H.  E.  Benedict, 
Executive  Secretary,  National  War  Savings  Committee. 


June  3,  1918. 

Mr.  Wm.  H.  Johns, 

Division  of  Advertising,  Nexo  York,  N.   Y. 

Dear  Mr.  Johns  :  On  behalf  of  the  American  Red  Cross  and  all  of  us  here  at  head- 
quarters, may  we  express  our  appreciation  and  indebtedness  most  heartily  for  your 
splendid  cooperation  and  practical  support  which  you  have  given  in  the  second  war- 
fund  camj^aign. 

Our  subscriptions  went  over  the  top  by  68  per  cent,  and  this  splendid  achievement 
is  due  in  no  small  part  to  the  advertising  in  the  magazines,  farm  press,  and  trade 
papers  which  supplied  space  for  publicity  purposes  through  the  division  of  advertising. 
Your  cooperation  was  invaluable  to  us,  and  we  want  you  and  all  who  aided  us  to 
know  how  warm  our  feelings  are  toward  each  and  every  one  for  the  help  which  has 
been  given  to  the  Red  Cross. 

Very  truly,  yours, 

Henry  P.  Davison. 
Chairman  Red  Cross  War  Council. 

John  G.  O'Kelley,  of  the  Fuel  Administration:  Advertising  is  one  of  the  most 
powerful  weapons  which  the  Federal  Fuel  Administration  has  made  use  of  in  winning 
its  fight  against  a  nation-wide  fuel  famine.  No  man,  who  has  followed  the  course  of 
public  events  since  this  country  entered  the  war,  can  help  but  realize  that  publicity 
is  doing  its  part  in  helping  this  country  to  defeat  Germany. 

Mr.  George  Fowler,  of  American  Red  Cross:  Mr.  Chairman  and  gentlernen, 
from  Mr.  Davison  down — or,  as  Mr.,  Mr.  Davison  would  say,  from  Mr.  Davison 
up — everybody  at  the  Red  Cross  appreciates  the  thing  that  has  been  accomplished 
by  the  work  of  you  men  who  are  working  in  the  Division  of  Advertising  under  the 
Committee  on  Public  Information.  We  had  faith.  Faith  has  been  spoken  of  as 
essential.  We  have  felt  that  the  first  war  fund  was  raised  largely  on  the  faith  of  the 
country.  That  may  or  may  not  apply  in  the  second  war  fund.  It  will  apply  if  we 
use  publicity,  advertising,  in  the  proper  way,  to  create  faith. 

I  had  the  pleasure  of  sitting  next  to  Mr.  Britton,  Mr.  Daniels's  secretary,  who, 
before  he  came  to  the  Navy  Department,  was  running  a  few  papers  down  in  North 
CaroUna,  and  I  said  to  him"  that  it  seemed  to  me  that  this  meeting  was  an  indication 
that  advertising  is  coming  into  its  own,  along  with  the  editorial  locally,  as  a  national 
force  to  mold  and  make  public  opinion.  In  fact,  this  body  here  is  putting  the  order 
into  coordination  and  serve  into  conservation.     That  is  what  they  are  accomplishing . 

The  recognition  by  the  Government  of  advertising  has  affected,  first,  I  am  happy 
to  say,  the  work  of  the  Red  Cross  for  the  second  war-fund  campaign.  Owing  to  the 
difficulties  that  the  Treasury  Department  experienced,  naturally,  in  the  settling  upon 
the  date  for  the  Liberty  loan,  the  Red  Cross  did  receive  that  earlier  help,  and  it 
was  not  an  ill  wind  for  us. 

When  Mr.  Newell  and  I  first  met  with  the  Division  of  Advertising,  we  said  to  Mr. 
Johns  and  his  associates,  "We  want  to  get  help  for  the  Red  Cross  war-fund  campaign" 
Mr.  Johns  said,  "What  can  we  do  now?"  He  used  the  word  "now,"  which  I  think 
was  typical  of  Johns  and  typical  of  the  committee  on  advertising.  It  was  not  what 
we  can  do  next  week  or  next  month,  but  what  we  can  do  now.  The  work  that  we 
have  done  with  the  Division  of  Advertising  has  been  to  act  as  their  client. 

The  preparation  of  copy,  as  Mr.  Johns  has  outlined,  was  arranged  through  the 
various  advertising  agencies.  We  took  our  cue  from  Cusack  in  the  Outdoor  Adver- 
tising, and  at  the  end  we  found  ourselves  with  the  modest  57,000,000  of  circulation, 
and  an  appropriation  for  advertising,  through  the  patriotism,  of  the  advertisers  and 
publishers,  contributed  through  the  division,  to  the  extent  of  $170,000,  which  is  a 
very  respectable  appropriation  for  many  commercial  houses  extending  over  a  whole 
year  of  time.   . 


52  SOME    POSTAL    ECONOMICS 

There  has  come  to  my  mind,  as  I  have  seen  the  mechanics  of  the  division  worked 
out,  as  I  have  seen  them  prepare  copy,  take  all  charge  of  the  preparation  of  plates, 
produce  such  drawings  as  "The  greatest  mother  in  the  world,"  which  you  see  on 
the  screen — as  I  have  seen  them  do  things,  which  are  going  to  affect,  not  the  mere 
raising  of  this  $100,000,000  which  the  Red  Cross  is  going  out  after,  but  the  attention 
of  the  country  as  a  whole,  through  the  Red  Cross,  it  has  seemed  to  me  that  the  divi- 
sion, while  it  is  occupying  a  higher  place,  will  find  maybe  even  a  greater  place  for 
itself  in  those  days  of  reconstruction  which  shall  come  after  the  war  is  over,  and  that 
there  is  something  which  has  naturally  occurred,  and  I  beheve  that  they  will  lay 
their  lines  so  that  the  work  after  the  war  shall  be  one  of  education,  and  that  the  work 
done  now  shall  have,  as  Mr.  Schwab  says,  words  of  encouragement. 

The  Napoleon  story  that  Mr.  Schwab  told  made  me  feel  that  we  were  fortunate 
in  having  the  divison  take  the  Red  Cross  as  its  first  battle,  because  it  is  going  to  win, 
and  in  winning  the  Red  Cross  battle  I  think  that  possibly  the  Red  Cross  will  help 
to  serve  the  purpose  of  putting  advertising  on  the  governmental  map,  as  it  should 
be  placed. 

The  Red  Cross  is  not  actually  a  governmental  department.  It  is  headed  by  the 
President.  It  is  authorized  by  Congress,  its  accounts  are  audited  by  the  War  De- 
partment, and  in  all  but  name  it  is  a  part  of  the  Government.  It  seems  to  me  the 
Red  Cross  comes  very  close  to  the  Government  in  placing,  as  it  did  last  Christrnas 
time,  twenty  millions  behind  the  Red  Cross.  Anything  the  Division  of  Advertising 
can  accomplish  will  affect  the  country  as  a  whole,  because  practically  no  family 
now  is  without  a  member  of  the  Red  Cross,  practically  no  newspaper  is  without  90 
per  cent  of  its  readers  members  of  the  Red  Cross. 

And  so  it  seems  to  me  that  the  mere  raising  of  $100,000,000  is  a  very  minor  part 
that  the  Division  of  Advertising  will  have  to  play.  They  will  play  the  much  larger 
part  of  taking  the  country  to  the  Red  Cross  and  the  Red  Cross  to  the  country.  That 
is  what  the  Division  of  Advertising  has  done.  As  I  heard  the  other  night  Solicitor 
John  Davis  tell  a  story  of  a  Scot  who  believed  in  predestination,  and  before  he  went 
over  the  top  he  stuck  an  extra  pistol  in  his  belt.  The  man  next  to  him  said,  "  Scotty, 
I  thought  you  believed  in  predestination.'?  "Ah,  but  I  thought  I  might  meet  a  Ger- 
man whose  day  had  come."  So  in  the  Division  of  Advertising  you  have  no  need 
for  extra  pistols,  because  you  have  seven  good  revolvers. 

June  21,  1918. 
Mr.  Floyd  W.  Parsons, 

Editor  Coal  Age,  Tenth  Avenue  and  Thirty-sixth  Street, 

New  York  City. 

Dear  Mr.  Parsons:  I  have  seldom  read  an  article  dealing  with  so  technical  a 
subject  as  coal  with  as  much  interest  as  I  read  your  War  as  an  industry  last  week. 
You  not  only  have  made  a  clear  exposition  of  dry  facts,  but  have  illuminated  them 
and  given  the  public  a  very  readable  article. 

Sincerely,  yours, 

H.  A.  Garfield, 
United  States  Fuel  Administrator. 


Capt.  L.  B.  Lent,  Signal  Corps,  United  States  Army:  I  have  been  a  reader  of  the 
American  Machinist  for  the  past  17  years  and  in  my  present  duties  as  chief  Engineer 
officer  at  this  flying  field,  I  find  it  to  be  of  great  assistance.  Our  method  of  keeping 
in  touch  with  what  is  doing  in  the  machinery  world,  and  of  finding  out  how  others 
would  do  the  things  that  we  are  called  upon  to  do,  is  to  read  the  American  Machinist. 


Commander  H.  E.  Lackey,  Naval  Proving  Ground,  Indian  Head,  Md. :  Upon  the 
receipt  of  the  American  Machinist  it  is  looked  over  by  the  officer  in  charge  and  passed 
on  to  supervisory  force  with  articles  of  special  interest  marked  for  attention.  The 
magazine  then  goes  to  machine  shop  and  drafting  room  at  which  points  supervisory 
mechanics  and  all  draftsmen  have  access  to  same.  The  advertisements  are  of  par- 
ticular interest  to  those  charged  with  getting  out  specifications. 


Inspection  Division,  Ordnance  Department :  The  articles  on  the  production  of  war 
materials  have  been  timely  and  instructive.  You  have  attempted  with  a  great  de- 
gree of  success  the  coordination  of  the  Government's  requirements  and  manufac- 
turers' production  along  essential  lines.  The  nuinitions  makers  as  a  liodj'  avail  them- 
selves of  the  information  contained  in  your  advertising  columns  as  to  machine  tools 
which  will  meet  their  requirements  in  the  production  of  war  material. 


SOME    POSTAL    ECONOMICS  53 

Gen.  Dickson,  Ordnance  Department:  The  American  Machinist  has  for  some  time 
past  printed  illustrated  articles  describing  the  methods  employed  in  Government 
establishments  which  have  helped  manufacturers  to  produce  different  articles  of 
ordnance.  These  articles  have  been  of  assistance  in  obtaining  prompt  and  economical 
production  of  urgently  needed  ordnance. 


President  Dayton-Wright  Airplane  Co. :  We  feel  it  would  be  improper  to  the  manu- 
facturers, especially  to  those  who  are  assisting  the  Nation  by  supplying  it  with  war 
material,  to  deprive  them  of  the  invaluable  assistance  which  your  magazine  affords. 
We  find  the  American  Machinist  a  great  help  in  many  lines  of  our  work. 


Curtiss  Aeroplane  and  Motor  Corporation :  Your  paper  is  invaluable  to  us  and  I  do 
not  see  how  we  could  get  along  without  it.  It  has  kept  us  posted  up  to  the  minute  on 
all  new  machine-shop  practices;  also  on  the  designing  of  new  tools  and  equipment 
It  further  has  been  of  great  value  to  us  in  placing  orders  for  new  machinerj'. 


War  Board  American  Electric  Railway  Association:  We  appreciate  very  much 
what  the  Electrical  Railway  Journal  is  doing,  and  especially  in  this  particular  case. 
Mr.  Cole's  work  is  a  very  valuable  one  and  should  have  the  attention  of  the  electrical 
men  throughout  the  world.  Our  board  was  very  much  pleased  with  the  spirit  of 
cooperation  shown  by  you  in  this  manner  and  on  behalf  of  the  board  I  desire  to 
express  our  great  appreciation  of  your  assistance. 

Hundreds  of  pages  could  be  filled  with  letters  and  other  evidence 
to  illustrate  the  quasi  public  character  of  the  Business  Papers,  and  how 
they  served  the  country  during  the  greatest  crisis  in  its  history. 

I  repeat  that  it  was  little  less  than  a  godsend  that  the  country  posses- 
sed the  highly  developed  national  channels  of  intercommunication 
afforded   by  our  great  periodicals  and  newspapers. 

After  the  war,  as  before,  the  functions  of  the  Press  will  be  no  less 
vital  to  the  well  being  of  the  Nation  both  socially  and  industrially.  The 
thinking  people  of  the  country  realize  this  and  will  not,  I  am  confident, 
permit  their  representatives  in  Washington  to  interfere  with  the  free 
expression  of  opinion  or  its  widest  dissemination,  in  the  form  of  periodi- 
cals and  newspapers. 

Zone  rates  on  the  information  carried  in  publications,  whether 
advertising  or  editorial  makes  no  difference,  would  restrict,  contract 
and  sectionalize  both  thought  and  business.  Low  flat  rates  on  the 
transportation  of  information  are  indispensable  to  the  continued  unity 
and  progress  of  this  country,  both  industrially  and  socially. 

I  have  faith  therefore,  that  the  force  of  public  opinion  will  compel 
Congress  to  repeal  the  Zone  Rates  on  Second  Class  matter  which  were 
dragged  through  in  the  form  of  a  "rider"  on  the  1917  Revenue  Bill. 


SOME    POSTAL    ECONOMICS  55 

APPENDIX  A 

Washington,  D.  C,  June  27,  1918. 

Mr.  Allen  H.  Richardson, 
Publishers'  Adnsonj  Board, 

200  Fifth  Avenue,  New  York,  N.   Y. 

Dear  Sir  :  In  answer  to  your  letter,  I  beg  to  say  I  prefer  not  to  accept  a  retainer  to 
appear  before  legislative  committees  upon  matters  of  public  policy,  as  in  such  mat- 
ters, if  I  have  anything  to  sa.y,  I  desire  to  speak  only  as  a  citizen. 

I  have  no  hesitation  in  saying  that  I  regard  the  zone  system  of  postal  rates  for  news- 
papers and  periodicals  coming  under  the  definition  of  second-class  mail  matter  as 
ill-advised.  The  Commission  on  Second-Class  Mail  Matter,  appointed  in  1911,  of 
which  I  was  a  member,  considered  this  question,  and  reported  unanimously  against 
the  zone  system.     We  said  in  that  report: 

"The  policy  of  zone  rates  was  pursued  in  the  earlier  history  of  our  post  office  and 
has  been  given  up  in  favor  of  a  uniform  rate,  in  view  of  the  larger  interests  of  the 
Nation  as  a  whole.  It  would  seem  to  the  commission  to  be  entirely  impracticable  to 
attempt  to  establish  a  system  of  zone  rates  for  second-class  matter.  Progress  in  the 
post  office,  with  respect  both  to  economy  in  administration  and  to  public  conven- 
ience, leads  awa}^  from  a  variety  of  differential  charges  to  uniform  rates  and  broad 
classifications." 

In  my  judgment  the  zone  system  for  second-class  mail  matter  is  unjust  to  the  pub- 
lishers and  unjust  to  the  public.  It  not  only  imposes  upon  the  publisher  the  addi- 
tional rates  upon  a  sectional  basis,  but  it  m.akes  necessary  the  added  expense  for  the 
necessarj'^  zone  classifications  at  a  time  when  every  economy  in  production  and  dis- 
tribution is  most  important.  It  introduces  a  complicated  postal  system,  to  the  very 
great  inconvenience  of  the  pul^lisher  and  the  pul)lic  when  there  should  be  a  constant 
effort  toward  greater  simplicity.  There  is  no  more  reason  for  a  zone  system  of  rates 
for  newspapers  and  magazines  than  for  letters.  Newspapers  and  magazines  are 
admitted  to  the  second-class  postal  rates  on  the  well-established  policy  of  encouraging 
the  dissemination  of  intelligence,  but  a  zone  system  is  a  barrier  to  this  dissemination. 
If  it  is  important  that  newspapers  and  magazines  should  be  circulated,  it  is  equally 
important  that  there  should  not  be  sectional  divisions  to  impede  their  general  circula- 
tion throughout  the  entire  country. 

We  are  proud  at  this  moment  of  our  united  purpose,  but  if  we  are  to  continue  as  a 
people  to  cherish  united  purposes  and  to  maintain  our  essential  unity  as  a  Nation  we 
must  foster  the  influences  that  promote  unity.  The  greatest  of  these  influences, 
perhaps,  is  the  spread  of  intelligence  dilTused  by  newspapers  and  periodical  literature. 
Abuses  in  connection  with  second-class  mail  matter  will  not  be  cured  by  a  zone  system 
of  rates.  That  will  hurt  the  good  no  less  than  the  bad,  and  perhaps  some  of  the  best 
sort  of  periodical  literature  will  be  hit  the  hardest. 

We  do  not  want  to  i)romote  sectionalism,  and  one  country  means  that  in  our  corres- 
pondence and  in  the  diffusion  of  necessary  intelligence  we  should  have  a  uniform 
postal  rate  for  the  entire  country.  The  widest  and  freest  interchange  is  the  soundest 
public  policy. 

I  hope  that  Congress  will  repeal  the  j)rovision  for  the  zone  system,  which  is  decided- 
ly a  looking-backward  and  walking-backward  measure. 

Very  sincerely,  yours, 

Charles  E.  Hughes. 

APPENDIX  B 

The  Post  Office  Department  has  frankly  admitted  that  it  has  no  adequate  postal 
cost  data  on  periodicals  and  newspapers  later  than  that  which  it  compiled  for  the 
Penrose-Overstreet  C'ommission  of  1907  and  the  Hughes  Commission  of  1912.  To 
all  requests  for  more  recent  data  the  Post  Office  Department  has  invariably  referred 
inquiries  to  the  report  of  the  Hughes  Commission  of  1912,  based  upon  weighings 
and  calculations  two  years  prior  to  that  date  (19I0\,  as  the  latest  statistics  available 
in  computing  present  costs  of  postal  handling  on  newspapers  and  periodicals. 

If  the  figures  sul)mitted  by  the  Post  Office  officials  arc  correct,  then  they  arc 
open  to  the  charge  of  extravagance  and  inefficiency.  Let  us  examine  these  official 
figures  and  statements: 


56 


SOME    POSTAL    ECONOMICS 


Joseph  Stewart,  Special  Assistant  in  the  Post  Office,  submitted  an  official  table 
in  May,  1918* — the  latest  available — declaring  that  the  eighth  zone  transportation 
cost,  exclusively  is  8.76  per  pound. 

(Senate  Committee  on  Post   Offices  and   Post   Roada,  65th 
Con.,  2d  Session,  April  30th  and  May  1st,  1918,  page  54.) 

At  the  same  hearing,  and  within  a  few  hours.  First  Assistant  Postmaster  General 
Koons  testified  as  follows : 

"Now,  I  can  illustrate  that  by  one  of  the  news  companies.  This 
company  gave  us  17  per  cent  of  their  shipments  at  a  cent-a-pound  rate, 
and  none  of  it  was  east  of  Denver  (7th  and  8th  zones).  That  was  an 
organization  in  New  York  City.  *  *  *  Now,  it  costs  us  10  cents 
a  pound  transportation,  practically,  on  every  pound  that  they  gave  us. " 

(Testimony  of  the  First  Assistant  Post- 
master-General Koons,  page  81,  Ibid.) 

It  is  unusual  to  find  a  government  official  dealing  thus  contradictorily  with  im- 
portant figures  for  the  guidance  of  Congress.  For:  on  page  68  of  the  sam^  official 
testimony,  this  same  First  Assistant  Postmaster  General  at  the  same  hearing  testified: 

"One  gentleman  testified  that  he  had  2,200  subscribers  in  California 
(eighth  zone).  Now  the  transportation  on  that  alone  costs  15  cents  a 
a  pound,  "f 

(Testimony  of  the  First  Assistant  Post- 
master-General Koons,  page  68,  Ibid.) 

Jjet  US  compare  these  cost  estimates  of  transportation  with  the  transportation 
charges  quoted  by  the  railroads  for  that  identical  kind  and  manner  of  transportation 
by  the  Pennsylvania  and  the  New  York  Central  Railroads,  to  newspapers  and 
periodicals,  in  carload  lots. 

Per  100  lbs. 

From  New  York  to  Denver,  Colo $2. 121^ 

"       "  "     "  San  Francisco,  Cal 2  56Mt 

The  railroads  have  extremely  high  overhead  charges,  interest  on  bonds,  dividends 
on  stock  so  high  that  they  have  made  the  numerous  stock  issues  of  these  great 
railroads  profitable  securities  in  the  stock  market  for  years.  The  Post  Office  has 
none  of  these  overhead  charges;  the  railroads  are  out  for  profits  and  the  Post  Office 
is  not. 

*For  more  detailed  comparison  the  table  in  full  is  herewith  given: 

Joseph  Stewart,  Special  Assistant  to  the  Attorney  General,  submitted 
a  memorandum  containing  the  following  table: 

(Senate  Committee  on  Post  Offices  and  Post  Roads,  Sixty-fifth 
Congress,  Second  Session,  April  30  and  May  1,  1918,  page  54): 

Estimated  average  cost  of  carrying  and  handling  second-class  mail  matter  per  pound 

the  distance  indicated: 

Trans- 
Mean    distance         portation  Handling 
Parcel-post  zone                               (to  center  of            (railroad  and  over- 
zone  indicated)       and  other)  head  charges    Total 
Miles                    Cents  Cents        Cents 

First,  second  and  third 225                         1.58                    3.86  5.44 

Fourth 450                         2.49                    3.86  6.35 

Fifth 800                         3.90                    3.86  7.76 

Sixth 1,200                         5.52                    3.86  9.38 

Seventh 1,6Q0                         7.14                    3.86  11.00 

Eighth 2,000 8.76 3.86  12.62 

fit  will  be  noted  that  in  the  seventh  and  eighth  zones  First  Assistant  Postmaster- 
General  Koons'  allegations  are  approximately  from  25  to  70  per  cent,  different  from 
those  in  Special  Assistant  Joseph  Stewart's  statistical  table.  What  do  such  postal 
computations  mean  in  the  light  of  their  absurd  contradictions?     And  where  is  the  truth? 

JThe  costs  in  various  zones  from  New  York  City  on  railroad  transportation  charges 
for  the  Pennsylvania  and  New  York  Central  Railroads  are  herewith  furnished  as  a  basis 
for  comparison: 

Zone 

Pittsburgh,  Pa per  100  pounds  $0.45  4th 

Columbus,  Ohio "     "  "  .58"^  and  $0.59       4th 

Chicago,  111 "      "  "  .75         "        .99       5th 

Denver,  Colo "      "  "  2.12>$  7th 

San  Francisco,  Cal "      "  "  2.56H  8th 

New  Orleans,  La "     "  "  1 .  54  6th 

Minneapolis,  Minn "      "  "  1 .  071^  6th 

Charleston,  S.  C "      "  "  1 .  57)^  5th 


SOME    POSTAL    ECONOMICS  57 

And  these  protit-makiug  railroads  can  do  for  2.12  cents  and  2.56  cents  what  the 
Post  Office  officials  claim  costs  S.7G  cents,  10  cents  and  IT)  cents  for  the  same  trans- 
portation service!  And  upon  such  uncertainties  and  contradictions,  Con- 
gress has  overturned  the  equal  postage  rates  for  all  American  citizens  upon 
their  reading  matter ! 

The  First  Assistant  Postmaster  General  states  that  it  cost  the  Post  Office  Depart- 
ment from  four  to  six  times  more  for  its  transportation  than  the  railroad  charges  for 
identically  the  same  service. 

The  transportation  charges  of  the  railroads  are  given  for  units  of  not  larger  than 
one  car — a  trivial  unit;  while  the  Post  Office  handles  thousands  and  thnusands  of 
carload  lots  on  steady  and  continuous  service  throughout  each  year. 

Take  into  consideration  a  figure  of  transportation  cost  of  second-class  mail  from 
the  Postmaster  General's  Annual  report  for  1917,  page  18. 

"The  total  shipment  of  periodicals  by  freight  during  the 
fiscal  year,  therefore,  consisted  of  4,367  carloads  weighing 
127,289,781  pounds  at  a  cost  of  $686,608.75." 

Therefore,  on  the  official  statistics  and  information  available  to  Postmaster  General 
Burleson — and  which  was  furnished  him  for  his  annual  report — uw  find  that  the  final 
official  and  apparently  reliable  figures  for  the  cost  of  postal  transportation 
of  second-class  matter  is  but  one-half  cent  a  pound. 

Approximately  one-half  cent  a  pound!  And  this  cost  covers  "freight,  cartage  and 
unloading  charges!"  The  explanation  of  this  discrepancy  from  high  official  sources 
is  submitted  to  your  judgment.  Although  in  this  connection  the  splendid  analysis 
in  a  speech  made  by  Congressman  Steernerson  of  Minnesota  is  worthy  of  quota- 
tion in  this  matter  of  postal  cost  transportation. 

"Gentlemen,  it  is  as  plain  as  sunshine  that  when  the 
volume  of  mail  is  4,000,000,000  pounds,  and  we  pay  the  rail- 
roads $60,000,000,  that  we  only  pay  IJ2  cents  per  pound  on 
the  average." 

(Congressman  Steenerson,  member  of  the  Com- 
mittee on  Post  OfEces  and  Post  Roads;  speech  of 
May   14,    1917,   reported  in   Congressional    Record.) 

Yet  under  the  present  postal  zone  law  there  is  exacted  10  cents  a  pound  to  the 
eighth  zone,  outside  of  a  flat  increase  of  50  per  cent  on  the  reading  pages,  with  the 
fantastic  allegation  that  even  this  stupendous  postage  rate  spells  a  huge  loss! 

It  is  on  such  free-and-easy  figuring  that  the  romance  of  a  book-keeping  deficit 
in  the  Post  Office  has  been  built  up.  And  this  is  the  face  of  the  fact  that  the  Post 
Office  in  the  official  annual  report  for  1917  showed  a  surplus  of  over  twelve  million 
dollars;  and  for  this  year,  1918,  approximately  twenty  million  dollars  surplus,  after 
deducting  the  war  postage  rates! 

APPENDIX  C 

The  Post  Office  officials  continuously  refer  to  the  periodical  and  newspaper 
postal  cost  computations  and  estimates  which  it  furnished  the  Hughes  Commission. 
The  Hughes  Postal  Commission  consisted  of  the  Hon.  Charles  E.  Hughes;  Henry  A. 
Wheeler,  president  of  U.  S.  Chamber  of  Commerce,  and  A.  Lawrence  Lowell,  presi- 
dent of  Harvard  University.  Therefore  a  reproduction  of  this  interesting  postal 
tabulation  is  important;  although  the  value  of  these  tabulations  furnished  by  the 
Post  Office  Department  is  considerably  lessened  in  the  light  of  the  somewhat  con- 
temptuous references  to  these  "tabulations"  in  the  Hughes  Postal  Commission 
report  itself,  for  of  them  it  says: 

"There  is  no  evidence  upon  which  a  finding  can  be  made 
as  to  the  cost  for  the  services  above  mentioned  of  other 
subdivisions  of  second-class  mail;  that  is,  of  the  different 
sorts  of  newspapers  and  periodicals." 

(Page  137,  Message  of  the  President  transmitting  the  Annual  Re- 
port of  the  Postmaster  General  for  1911,  containing  Hughes  Postal 
Commission  Report.) 

But  even  more  drastic  than  this  is  the  further  statement  of  the  Hughes  Postal 
Committee  as  to  Post  Office  "evidence"  of  postal  costs  for  it  states  that: 
"The  evidence  submitted  does  not  justify  a  finding  of 
the  total  cost  of  transportation  and  handling  the  different 
classes  of  second-class  mail  matter." 

(Page  137.  Ibid.) 


58 


SOME    POSTAL    ECONOMICS 


And  again: 

"The  policy  of  zone  rates  was  pursued  in  the  earlier 
history  of  our  post  office  and  has  been  given  up  in  favor  of  a 
uniform  rate  in  view  of  the  larger  interests  of  the  Nation 
as  a  whole. 

"It  would  seem  to  the  Commission  to  be  entirely  im- 
practicable to  attempt  to  establish  a  system  of  zone  rates 
for  second-class  matter." 

(Ibid,  page  140.) 

It  is  true,  however,  that  the  Hughes  Commission,  after  totally  discrediting  the 
analysis  and  tabulations  spread  before  it,  assumes,  with  or  without  these  discredited 
tabulations,  what  it  calls  "an  approximate"  cost  of  postal  service.  But  these 
statistics,  tabulations  and  postal  costs,  clearly  dismissed  as  worthless  by  the  Hughes 
Postal  Commission,  are  the  selfsame  statistics  which  the  Post  Office  officials  have 
ever  since  offered  to  Congress  as  the  latest  statistics  upon  these  postal  subjects! 

This  compilation  was  made  in  1908;  laid  before  the  Hughes  Commission  in  1911; 
and  has  now  been  submitted  to  the  Senate  Committee  on  Post  Offices  and  Post 
Roads,  65th  Congress,  Second  Session,  April  30,  and  May  1st,  1918,  by  First  Assistant 
Postmaster  General  Koons,  as  the  latest  Post  Office  data!     This  is  the  famous  table: 

(Letter  of  First  Assistant  Postmaster  General  Koons,  June  13,  1918.) 


"Table  submitted  to  the  Hughes  Commission  by  the  Post  Office  Department,  October  21,  1911, 
showing  the  revenue,  expense,  and  profit  or  loss  per  pound  and  per  piece  of  the  several  classes  of 
mail: 


Classes  of  mail. 


<u  a 


s 
a 

K  0. 


T3 
cj  0 

a  O 

<u  Q, 

'"    0. 


H 


a 

3 
Pu  P. 


0) 

C.T3 

•w  ;3 
O  O 
1-)  P. 


6 


a 

3 

M    O 

a;  Q. 
o 

f^  a 


o 


a. 


9 


C  t. 


10 


0.2 
►4ft 


First 

Second: 

Paid  at  pound  rate  . 

Free  in  county 

Transient 

To  Canada 

Local  delivery 

All  second  class 

Third 

Fourth 

Congressional  free 

(franked) 
Departmental  free 

(penalty) 
Foreign 


0.S3026  0.56066  0.26960  45.10  0.01841  .01243  .00598  

.01000  .08476  0.07476  4.79  .00209  .01769  01560 

06731  06731  6.45  01104  01104 

.05636  .09498  03862  3.00  .01879  .03166  01267 

.04678  .04865  00187  1.98  .02363  .02457  00094 

.05242  .03495  .01747  3.80  .01379  .00920  .00459  

.01130  .08333  07203  4.80  .00235  .01736  01501 

.14047  .15237  01190  9.58  .01466  .01590  00124 

.16492  .081.58  .08334  3.16  .05219  .02582  .02637  

15664  15664   1.99  07871  07871 

10450  10450  6.38  01942  01942 

.15879  .10929  .04950  10.32  .01538  .01059  .00479  

(Senate  Committee  on  Post  Offices  and  Post  Roads,  Sixty-fifth 

Congress,  Second  Session,  April  30  and  May  1,  1918,  page  65.) 


This  table  bears  internal  evidence  of  its  own  inaccuracy  and  absurdity.  The 
expense  of  second-class  mail  is  given  at  $0.8333  per  pound.  Observe  that  the  postal . 
expense  per  piece  of  first-class  mail  (letters  and  postcards)  is  $0.012 13,  while  the 
expense  per  piece  of  second-class  mail  (periodicals  and  newspapers)  paid  at  pound 
rate  is  $0.01736.  Or,  in  other  words,  it  costs  4^  per  cent  more  per  piece  to  handle 
second-class  mail  than  letters! 

What  an  obvious  absurdity! 

Now,  then,  thc^  farts.  A  letter  is  collected  ijy  a  postman  from  a  letter  box  at  thi> 
corner;  it  is  carried  to  the  Post  Office;  it  is  sorted  in  the  Post  Office,  "worked  "'as 
it  is  technically  caUed;  post-marked;  distributel  into  its  proper  case;  sacked  in 
special,  heavy,  leather  pouches  (and  sometimes  the  bag  weighs  more  than  its  con- 
tents); it  is  tagged  with  its  address;  it  is  then  carrietl  to  a  truck;  next  driven  to  the 
railroad  car;  and  at  the  car  again  handled  from  the  truck  into -the  car. 


SOME    POSTAL    ECONOMICS  59 

In  the  case  of  second-class  matter  (periodicals  and  newspapers)  they  are  delivered 
to  the  car  b}'  the  publisher  already  sacked,  routed  and  addressed  in  light  weight 
canvas  sacks  filled  to  capacity.  And  not  until  then  does  the  postal  cost  to  the  Post 
Office  begin. 

And  yet,  in  the  face  of  this  tremendously  expensive  handling  cost  on  first-class 
mail,  as  compared  with  second-class  mail,  the  Post  Office  Department  handed  to 
the  Hughes  Commission  a  statement  that  it  cost  1+2  per  cent  more  per  piece  for  second- 
class  matter  than  for  first-class  matter!     Is  not  that  an  obvious  absurdity? 

Such  figures  are  absurd  on  their  very  face,  and  discredit  any  and  all  computations 
in  which  they  are  involved  or  to  which  they  are  attached. 

In  the  table  furnished  by  the  Post  Office  officials  to  the  Hughes  Commission — and 

still  the  latest  and  best  statistics  compiled,  according  to  their  statements — that 
"local  delivery"  of  second-class  matter  is  charged  with  an  expense  of  .ISO. 0349.5. 

In  order  to  realize  some  bearings  of  this  important  figure  let  us  turn  to  an<}ther 
page  of  Post  Office  official  statements  and  statistics. 

Absolute  statistics  offered  by  the  Post  Office  as  such  as  to  what  constitates  not 
only  overhead,  but  all  other  charges  on  periodicals  and  newspapers  other  than  trans- 
portation, is  found  on  page  61  (Senate  Committee  on  Post  Offices  and  Post  Roads, 
Sixty-Fifth  Congress,  Second  Session,  April  30  and  May  1,  1918),  in  which  First 
Assistant  Postmaster  General  Koons  states  that  "the  average  cost  of  handling  and 
overhead  charges  (second-class  mail)  would  be  3.86  cents  a  pound,  "and  that  this, 
moreover,  includes  every  charge  from  the  salary  of  the  Postmaster  General  on  down 
to  the  Rural  Route  Service. 

Turn  now  to  the  tabulation  again,  note  there  that  the  '^ local  delivery"  second-class 
mail  is  $0.03495  pev  pound;  the  overhead  on  that  and  all  other  second-class  matter  is 
stated  to  be  $0.0386  per  pound.  Thus  we  have  the  amazing  condition,  offered  as 
sober  statistical  proof  by  Post  Office  officials,  that  the  overhead  on  local  delivery  is 
greater  than  the  total  postal  expense! 

To  put  it  a  little  differently,  the  Post  Office  solemnly  assures  us  that 
the  total  expense  of  one  pound  of  second-class  matter  is  $0.03495  per  pound, 
and  yet  at  the  same  time,  with  eaual  solemnity,  assures  us  that  the  over- 
head alone  on  the  same  pound  is  $0.0386  per  pound! 

hi  other  ivords,  the  lesser  has  performed  the  miraculous  feat  of  swallowing  the  greater. 
Of  what  value  are  any  figures  evolved  by  such  amazing  accounting  methods? 

What  comment  is  adequate  to  paint  this  statistical  lily! 

STATISTICAL   OBSCURITIES   AND   OVERHEAD   COSTS 

Is  the  overhead  charge  against  certain  classes  of  mail  on  a  pound  basis 
and  against  other  classes  of  mail  on  a  piece  basis? 

In  the  Hughes  table  the  average  number  of  piece  of  second-class  mail  per  pound 
is  given  as  4.80,  while  the  number  of  pieces  of  first-class  mail  per  pound  is  4.5.10 — 
while  postal  cards  alone  in  first-class  mail  run  over  170  pieces  to  the  pound! 

If  the  overhead  is  charged — as  there  seems  reason  to  believe  is  the  method — on  the 
basis  of  poundage,  on  second-class  matter  we  get  an  alleged  overhead  of  3.86  cents 
per  pound — each  pound  consisting  of  4.80  pieces;  or,  an  overhead  per  piece  of  prac- 
tically .008  cents  per  piece.  This  same  overhead  rate  of  eight-tenths  of  a  cent  per 
piece  applied  to  postcards — on  which  the  Department  claims  it  makes  a  profit — 
would  give  an  overhead  of  $1.36  per  pound! 

Is  the  Post  Office  comparing  pounds  of  postal  matter  regardless  of  the  number 
of  pieces  that  compose  each  pound? 

Are  they  comparing  a  pound  of  magazines  and  periodicals — where  sometimes 
one  magazine  will  weigh  four  pounds  and  where  in  extreme  cases  it  will  take  16 
pieces  to  the  pound — with  letters  and  postcards  that  run  from  38  or  170  pieces 
to  the  pound? 


60 


SOME    POSTAL    ECONOMICS 


Let  us  assume  a  one-pound  magazine;  it  goes  to  one  address.  It  has  one  handling; 
it  has  one  distribution;  it  has  but  one  delivery  to  a  single  reader.  It  has  no  cost  of 
collection  because  publishers  deliver  it  ready  sacked  and  addressed  to  the  Post  Office 
or  post-office  railroad  car. 

A  pound  of  letters  required  thirty-eight  different  handlings;  thirty-eight  separate 
distributions,  and  thirty-eight  deliveries  to  thirty-eight  different  addresses.  It 
has  had  thirty-eight  collections  by  postman  and  thirty-eight  handlings  and  distri- 
butions and  sackings  before  ever  it  gets  to  the  railroad  car. 

A  pound  of  postcards  requires  170  different  handlings,  l70  separate  distributions 
and  170  deliveries  to  170  different  readers. 

The  absurdity  of  comparing  a  single  pound  of  postal  matter  composed 
of  an  average  of  38  units  or  of  170  units  with  a  pound  of  other  postal  matter 
averaging  4.80  pieces  to  the  pound  is  absurd.  And  for  it  to  be  compared 
as  a  basis  of  determining  the  postal  cost  for  each — as  the  Post  Office  has 
done,  is  fantastic  and  self -discrediting. 


APPENDIX   D 


Much  has  been  alleged  about  postal  deficits.  As  a  matter  of  fact  there  is  no 
postal  deficit.  The  Postmaster  General's  report  for  1917  shows  a  surplus  of  over 
•112,000,000.  The  Post  Office  report  for  1918  shows  a  surplus  (after  deducting  the 
increased  receipts  from  war  postage)  of  over  $19,900,000! 

What  an  absurdity  to  talk  about  a  Post  Office  deficit,  when  there  is  none! 

"But,"  says  the  theoretical-deficit  champion,  "there  is  a  bgokkeeping  deficit, 
due  to  the  handling  of  second-class  mail." 

Of  course  the  importance  of  such  an  allegation  depends  upon  the  somidness  and 
accuracy  of  the  accounting  methods  used  in  determining  such  "book-keeping" 
deficit;  the  absurdities  and  unsoundness  of  Post  Office  accounting  methods  and  their 
discrediting  by  the  Hughes  U.  S.  Postal  Commission  in  its  official  report,  together 
with  the  fact  that  the  statistics  on  second-class  (periodical  and  newspaper)  postal 
costs,  offered  by  the  Post  Office  as  its  best  and  latest,  compiled  ten  years  ago,  in 
1908  definitely  controverts  the  deficit  allegation  as  a  present  day  condition. 

The  Post  Office  is  not  and  never  was  established  by  the  founders  of  this  nation 
and  the  great  Americans  who  have  contributed  to  its  development  to  be  a  money- 
making  institution.  It  was  a  vital  social  service  to  the  nation,  clearly  developed 
as  such  at  every  stage,  and  never  intended  to  be  considered  or  computed  in  terms 
of  -pecuniary  profit  and  loss. 

But  for  those  minds  that  are  given  to  considering  interesting  statistical  differences 
and  who  are  curious  as  to  academic  and  accounting  "deficits",  the  following  table 
is  offered  as  of  the  utmost  relevency  in  grasping  this  Post  Office  cost-of-service 
question.  Certain  States  spend  vastly  more  than  others  on  their  postal  up-keep. 
Not  infrequently,  in  fact  quite  generally,  these  are  the  States  that  contribute  least 
to  the  postal  revenues.  An  interesting  and  unavoidable  comment,  in  the  light  of 
these  tabulations  from  official  sources  is  that  the  States  that  contribute  least  to  the 
Postal  Revenues  of  the  nation,  are  those  States  in  which  the  aggregate  magazine 
circulation  (second-class  mail  matter)  is  the  lowest  per  hundred  of  population. 

It  may  be  generally  observed  that  the  number  of  postal  patrons  per  square  mile, 
and  the  use  these  patrons  make  of  the  postal  function  exercises  a  controlling  influence 
upon  the  postal  revenue.  Comparison  of  Montana  with  North  Carolina  furnishes 
a  striking  illustration  of  this  economic  postal  fact. — Note  these  figures: 


STATES 


Montana 

North  Carolina . 


Pop.  per  sq. 

mile 

Latest 

U.  S.  Census 


2.6 
45.3 


Per  Capita 

Postal 

Receipts 


6.24 
1.7.3 


Percentage 
of  each  State's 

postal  Rev. 
expended    for 
compensation 

to   post- 
masters, etc. 

30.43 
08.50 


Magazine 
circulation 
per  100  of 
population 


31.2 
6.3 


Percentage 
of    Native 
White  Popu- 
lation Latest 
U.  S.  Census 


67 


SOME    POSTAL    ECONOMICS 


61 


Here  is  the  complete  tabulation: 


TABLE  OF  COMPARATIVE  POSTAL  STATISTICS 


Percentage 

of  each 

State's  postal 

Per  cent 

Pop.  per  sq. 

Per  Capita 
Postal 

revenue  ex- 

Magazine 

of  Native 

STATES 

Mile 

pended  for 

circulation 

White  Popu- 

Latest 

Receipts^ 

compensation 

per  100 

lation  Latest 

U.  S. Census 

to  its  post- 
masters,   city 
and  rural 
Rprvicet 

population* 

U.  S.  Census 

New  England  States 

Maine 

24.8 

3.73 

49.88 

15. 

84.8 

New  Hampshire 

47.7 

3.46 

53.06 

13. 

77.4 

Vermont 

39.0 

3.58 

61.05 

14.5 

85.5 

Massachussetts 

418.8 

5.45 

26.42 

15. 

67.5 

Rhode  Island 

508.5 

3.78 

26.57 

13.7 

65.3 

Connecticut 

231.3 

4.92 

28.30 

18. 

69.1 

Eastern  States 

New  York 

191.2 
337.7 

6.91 
3.75 

21.10 
30.77 

14.4 
11.3 

68.4 

New  Jersey 

70.5 

Pennsylvania 

171.0 

4.29 

30.96 

12.8 

78.7 

Delaware 

103.0 

4.17 

34.02 

13.2 

76. 

Maryland 

130.3 

3.93 

31.12 

12.2 
(Included  in 

74. 

Dis.  of  Col 

5517.8 

9.31 

17.33 

Md.  xxx) 

64. 

Southern  States 

Virginia 

51.2 

2.91 

45.11 

9. 

66.1 

W.  Virgmia 

50.8 

2.46 

46.65 

10.4 

90.1 

N.  Carolina 

45.3 
49.7 

1.73 
1.71 

68.50 
62.44 

6.3 
5.5 

67.7 

S.  Carolina 

44.4 

Georgia 

44.4 

2.23 

54.07 

7.3 

54.3 

Florida 

13.7 

3.76 

41.72 

10.4 

54.4 

Alabama 

41.7 

1.50 

65.45 

5.6 

56.6 

Mississippi 

38.8 

1.33 

74.57 

4.4 

43.2 

Louisiana 

36.5 

2.20 

32.10 

7.1 

53.7 

Texas 

14.8 

2.95 

43.24 

10.6 

76.1 

Arkansas 

30.0 

1.83 

53.63 

8. 

70.8 

Kentucky 

57.0 

1.85 

51.46 

8.3 

86.8 

Tennessee 

52.4 

2.22 

60.98 

8.2 

77  5 

Middle   Western  States 

. 

Ohio 

117.0 

4.47 

34.53 

17.7 

85.1 

Indiana 

74.9 

3.11 

52.74 

15.9 

91.8 

Illinois 

100.6 

7.34 

22.55 

13.1 

76.7 

Michigan 

48.9 

4.27 

41.31 

18.4 

77.9 

Wisconsin . 

42.2 

3.44 

49.99 

11.8 

77.5 

Minnesota 

25.7 

4.79 

40.78 

16.1 

73. 

Iowa 

40.0 

3.96 

53.48 

15.5 

87. 

Missouri 

47.9 

4.62 

35.08 

14. 

88.2 

Western  States 

North  Dakota 

8.2 

3.65 

65.71 

13.9 

71.7 

South  Dakota 

7.6 

3.45 

61.03 

15. 

79.3 

Nebraska 

15.5 

4.33 

47.87 

17.8 

84.2 

Kansas 

20.7 

3.34 

67.94 

13.7 

88.7 

Montana 

2.6 

6.24 

30.43 

31.2 

71.5 

Wyoming 

1.5 

4.91 

28.75 

24.1 

77.6 

Colorado 

7.7 

5.15 

30.31 

21.4 

82.2 

2.7 
23.9 

3.04 
2.76 

30.21 
54.26 

11.1 
10.7 

86.1 

Oklahoma 

84.8 

Pacific  States 

• 

Washington 

17.1 

4.69 

30.62 

25.2 

76. 

Oregon 

7.0 

4.51 

36.12 

22.6 

82.1 

California 

15.3 
3.9 

6.18 
4.36 

25.44 
43.91 

27.5 
23. 

73.3 

Idaho 

85.6 

Utah 

4.5 

4.51 

27.68 

18.1 

81.2 

Nevada 

0.7 

5.11 

24.94 

21. 

68.7 

Arizona 

1.8 

4.96 

24.77 

22. 

61. 

Alaska 

39.80 

Per  capita  receipts  for  the  United  States  for  year  1918,  $3.67 — Postmaster  General's  Report, 
1918,  page  109. 

Aggregate  expense  for  all  States  for  Compensation  to  Postmaster,  City,  and 

Rural  Delivery  Service $133,348,500.96 

Aggregate  total  U.  S.  postal  receipts 381,092,575.82 

(Postmaster  General's  Report,  1918,  page  139.) 

The  average  expense  for  each  State's  own  service  is  therefore  35  per  cent  of  its  receipts.  Con- 
sequently, any  State  with  a  greater  percentage  of  expense  than  35  per  cent,  is  feeding  on  the  revenue 
from  the  States  whose  expense  is  less  than  35  per  cent.  A  glance  will  disclose  the  States  that  are 
below  the  margin  of  self  support — and  the  degree  of  this  dependency. 


HComputed  from  data  submitted  by  Postmaster  General  Report,  1918,  pps. 
tComputed  from  data  in  Postmaster  General's  Report  1918,  pps.  137-9. 
*See  foot  note  page  22. 


137-138. 


62  SOME    POSTAL    ECONOMICS 

APPENDIX  E 

As  a  deliberate  step  forward  in  the  development  of  the  postal  policy  of  the  United 
States,  the  one-cent-a-pound  uate  was  established  for  second-class  postage,  i.e. 
for  periodicals  and  newspapers.  This  cheapening  of  the  postage  rate  was  a  part 
of  the  deliberate  policy  of  the  United  States  intended  to  stimulate  the  widest  and 
easiest  spread  of  information  through  current  periodical  publications. 

The  importance  of  the  appended  table  hes  in  the  fact  that  periodical  poundage  is 
steadily  increasing,  and  as  it  has  increased  there  has  been  a  very  decided  general 
tendency  toward  decreasing  postal  deficits,  until  finally,  in  1911,  there  began  a 
series  of  postal  surpluses  unequalled  in  the  history  of  our  postal  department.  Bear 
in  mind  that  these  surpluses  have  been  achieved  concurrently  with  the  greatest 
increase  in  the  poundage  of  magazines  and  newspapers  handled  through  the  Post 
Office  Department  that  this  nation  has  ever  seen. 

This  tendency  to  decreasing  deficits,  accompanied  at  the  same  time  by  absolutely 
increasing  poundage  of  periodicals  and  newspapers,  is  still  further  accented  by  the 
fact  that  in  1896  there  was  introduced  the  Rural  Free  Delivery — the  most  expensive, 
and  a  very  important,  postal  function.  In  spite  of  these  huge  increased  general 
postal  expenses,  the  tendency  to  decreased  deficits  has  steadily  persisted. 

Exhaustive  study  of  postal  finances  in  relation  to  second-class  mail  was  made  by 
the  Hughes  Postal  Commission.  The  Commission  in  its  report  exhibited  a  "Com- 
parative Statement  of  Annual  Receipts  and  Expenditures — Deficits. " 

(Message  of  the  President  transmitting  the 
Annual  Report  of  the  Postmaster  General  for 
1911 — and  Report  of  the  Commission  on 
Second-class  matter,  page  63.) 

The  Exhibit  consists  of  a  table  showing  receipts,  etc.,  for  each  year  from  1865  to 
1910,  and  about  which  the  Commission  makes  a  very  significant  observation  as  a 
warning  to  careless  readers: 

"So  many  factors  are  involved  that  mistaken  inferences  may  easily 
be  drawn  from  these  figures,  and  various  arguments  have  been  based 
upon  them.  But  it  may  be  observed  that  neither  the  reductions 
in  the  paid-at-the-pound  rate  of  1874-1879  and  1885,  nor  the  in- 
crease in  tonnage  of  paid-at-the-pound  rate  matter  during  the  same 
period  — nor  yet  the  very  large  increase  of  1910 — can  be  shown  to 
have  exercised  a  controlling  influence  upon  the  Department's  deficit." 

Obviously,  increased  volume  of  second-class  matter  had  no  influence  in  creating 
a  postal  deficit,  because  the  business  of  handling  second-class  matter  is  not  conducted 
at  a  loss,  and  this  very  rational  conclusion  is  sustained  by  the  facts.     Here  they  are: 

Excess  of  Poundage  of  2d 

Year  Expenditures  Postage  Rate  Class  Mail  Handled 

Over  Revenue  (Ibid)  Page  02 

1875  $6,819,948.86         Two    cents    a   pound    when    issued    weekly 

or  more  frequently,  otherwise  .3  cents 
a  pound.      .A-ct  of  1874 Not  reported. 

1880  3,227,324.34         Two   cents   per  pound.     Act  of   March  3, 

1879,    which    established    the    present 
classifications  of  mail  in  4  classes 61,322,629 

1886  7,056,320.85         One    cent    per    pound.     Act    of    March    3, 

1885 109,962,589 

1910  5,848, .566. 88         Act  of  March  3.  1885 873,412,077 

And  in  1917  with  1,141,620,456  (including  free-in-country  1,202,339,658)  pountls 
of  second-class  mail  at  cent-a-pound  rate  at  the  Post  Office  Department  receipts  ex- 
ceed expenditures  by  $12,249,487.17. 

And  please  bear  in  mind  that  this  surplus  was  returned  though  the  postal  revenues 
were  required  to  meet  the  enormous  additional  expense  of  over  $52,000,000 — the 
cost  of  the  Rural  Free  Delivery  Service — which  was  inaugurated  October  1,  IS96. 
Besides  this  great  outlay,  free  and  deadhead  mail  of  vastly  increasing  volume  has 
been  handled  without  any  charge  whatever  upon  the  National  Treasury. 

And  it  nuist  be  reuK^mberod,  too,  that  the  compensation  to  employees  has  steadil\' 
increased — for  example,  the  average  compensation  of  carriers  in  1863  was  $500;  and 
the  Postmaster  General  says:  "The  salaries  of  carriers  was  increased  from  $1,126.50 
in  1917  to  $1,131.26  in  1918."     Report  1918,  page  24. 


SOME     POSTAL    ECONOMICS 


63 


These  statistics  and  tabulations,  therefore,  drawn  from  the  official  sources  of  years 
of  post  office  experience,  point  clearly  to  the  existence  of  an  economic  law  in  postal 
functioning:  that  there  is  a  clear  and  unmistakeable  relation  between  the  increasing 
poundage  oj  periodicah  and  neiospapers  and  decreasing  postal  deficits. 

TABULATION  OF  LESSENING  POSTAL  DEFICIT  WITH 
INCREASING  SECOND-CLASS  POUNDAGE 


Year 

Audited  Postal  Deficit 

Deficit 

Surplus 

Poundage 

(minus— 

-)  or  surplus  (phis+) 

1897 

—$11,431,579.41 

12.15 

310,658,155 

1898 

— 

9,054,551.75 

9.24 

336,126,338 

1899 

— 

6,630,135.60 

6.52 

352,703,226 

1900 

— 

6,410,358.10 

5.02 

382,538,999 

1901 

— 

3,981,520.71 

3.44 

429,444,573 

1902 

— 

2,961,169.91 

2.38 

454,152,359 

1903 

— 

4,586,977.16 

3.3 

509,537,962 

1904 

— 

8,812,769.17 

5.78 

569,719,819 

1905 

\ 

14,594,387.12 

8.95 

618.664,754 

1906 

— 

10,542,941.76 

5.9 

660,338,840 

1907 

— 

6,692,031.47 

3.5 

* 

712,945,176 

*1908 

— 

16,910,278.99 

8.1 

*694,865,884 

1909 

— 

17,479.770.47 

7.9 

723,233,182 

1910 

— 

5,881,481.95 

2.55 

817,772,900 

1911 

+ 

219,118.12 

■  ■  '.09 

893,296,908 

1912 

1,785,523.10 

'".n 

939,940,355 

1913 

+ 

4,510,650.91 

■i!72 

997,547,040 

1914 

+ 

4,376,463.05 

1.54 

1,026,901,367 

tl915 

11,333,308.97 

3.79 

1,047,144,274 

1916 

+ 

5,829,236.07 

i.'gg 

1,138,353,002 

1917 

+ 

9,836,211.90 

3.07 

1,141,620,450 

*Note  the  significant  fact  that  1908  is  the  only  year  to  show  a  decline  in  poundage  and  its  reflec- 
tion in  a  striking  jump  of  the  deficit  for  that  year. 

t(The  Postmaster  General  ascribes  the  deficit  of  1915  to  the  European  war  which  occasioned 
a  loss  of  $21,000,000  in  postal  revenue,  Report  1915,  page  4.) 

Throttle  the  easy,  equal  circulation  of  periodicals  and  newspapers  throughout 
our  nation  and  you  will  decrease  postal  receipts  in  the  aggregate,  and,  what  is  far 
more  important  you  choke  the  great  intellectual  artery  of  civilization  whereby  our 
nation  became  instantly  unified  and  made  one  in  its  social,  economic  and  political 
ideals.  Without  equal  undiscriminating  postage  and  easy  accessibility  of  the  pub- 
lications to  the  nation,  our  achievement  in  the  great  European  war  could  never  have 
been  accomplished. 


THIS  BOOK  IS  DUE  ON  THP  r  . 

STAMPED  BELOW      ^^  ^^^ 


i:i;;l,li 


liiiiiiiiili 


ill  I 


11 


LD  21-100^-8, 'J 


Gaylord  Bros. 

Makers 

Syracuse,  N.  Y. 

PAT.  JAN.  21,  1908 


38«348     /- 


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